ECB

Almost exactly one year ago I wrote the following: In practice, you could have sovereigns conduct a ‘sovereign debt swap’ whereby the ECB buys an agreed-upon portion of the existing debt from the sovereigns and then uses these funds…

So here we are, with the ECB demanding deflationary austerity from the member nations in return for the limited bond buying that has been sustaining some semblance of national government solvency, not seeming to realize it can’t inflate…

As I have been saying at Credit Writedowns, the ECB’s opposition to monetising sovereign debt is not about inflation concerns but rather its resistance to moving into a politicised quasi-fiscal role.

Here are the English-language links for 26 November.

Those that call for the ECB to substantially increase its sovereign bond purchases, or for Germany to agree to euro bonds, want the opposition to unilaterally disarm. They insist on putting the cart before the horse. In effect, under…

Many observers are confused. They cry for the ECB to "man up" and "do what it is supposed to do" and be the lender of last resort. It does have that function for banks, not for sovereigns. The lender of last resort to sovereigns is the…

Bank borrowing from the ECB reach a new high for the year at today's 7-day repo operation. Banks borrowed 247.17 bln euros for a week at 1.25% fixed rate. The key question is what are banks doing with those euros. The answer is that…

While Spanish Prime Minister-elect Mariano Rajoy was preparing for continued austerity in Spain, his Popular Party colleague, Former Spanish Prime Minister Jose Maria Aznar, was talking to Bloomberg Television about the outlook for his…

First, there is a disagreement about whether the ECB should be buying a significant amount of European bonds. Second, there is a disagreement over whether the ECB should declare that is it buying bonds for an extended period or unlimited…