Spanish regulators CNMC have released their report on the Royal Decree for De-Indexing the Spanish economy.
Developed economies such as Spain, where inflation is usually low, stable and predictable, a consensus has developed among economists that indexing economic variables to a particular list of prices (such as the Price and Stock Index) may cause negative distortions, affecting effective competition and devaluing information about supply and demand, which further hampers the making of good economic decisions.
The CNMC report identifies several points of contention and room for improvement. Among these are: The difficulty of applying efficiency and governance principles; the possibility of a downward revision for prices, needed exceptions to these rules for the energy and Public sectors, or the creation of formulas that will respect and promote the use of reliable, public databases.
Full Story: CNMC
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