Central bank policy makers in Europe and Japan may have to authorize the purchase of shares in lenders if they want to boost economic growth, according to Man Group Plc President Luke Ellis.
“What’s happening with the banks is causing the weakness in economies, not the other way round,” Ellis said in a Bloomberg Television interview Monday. “The starting point is the pressure on the banks.”
Negative interest-rate policies being pursued by the European Central Bank and the Bank of Japan are triggering concern that policy makers are leaning too much on extraordinary monetary policies in their attempts to fuel economic growth. The BoJ surprised markets by adopting negative rates in January, more than a year and a half after the ECB became the first major institution of its kind to venture below zero.
“At some point, they will probably all end up buying shares in banks to try to support them," said Ellis, adding that negative rates are “awful” for Japanese banks because they are pressuring earnings.
Man Group, the world’s largest listed hedge-fund firm, managed $78.7 billion at the end of 2015.