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A german sovereign wealth fund to save the euro

A german sovereign wealth fund to save the euro

The Eurosystem’s response

The Eurosystem’s role in intermediating large private-sector savings surpluses shouldn’t be regarded as abnormal. On the other hand, there have become few types of countries with consistently large external surpluses being intermediated for long periods exclusively by the private sector.

Generally in most countries running persistent current account surpluses (say, above 3% of GDP for a lot more than five years), the federal government or the central bank has accumulated large foreign assets either through a sovereign wealth fund or through forex intervention.