ECB is still the "last straw"
that the European crisis deepens, more and more financial institutions have to proceed to the lever bar of
Pacific Investment Management Company (PIMCO) Chief Executive Officer (CEO) Elian. Risk factors will continue to result in reduced liquidity and investors leave the market pressure is the more lasting, the greater the risk of large-scale fluctuations. Only by allowing the ECB to more positive action to reverse the situation. Deutsche Bank strategist Reid said, "If there is no positive action of the ECB does not know that in addition to large-scale sovereignty breach of contract, the euro zone will appear in what circumstances.
Previously, sources told Dow Jones Newswires said, there are two emergency "rescue" program of the euro area. One option is that the ECB first to provide loans to the IMF, then the IMF is funded to provide funds for the euro area member governments. Such programs avoid the differences caused by the ECB to provide funding directly to the member governments or large-scale purchase of government bonds, etc.. The second option is to ECB funding directly to EFSF.
last week, not only of peripheral Eurozone members yields across the board soared, France, Austria and other countries with AAA ratings 10-year bond yields over the German interest rate is also a new high. Even Germany has also disseminated the crisis by the crisis. According to the Financial Times reported in mid-June to August, the German bond yields trend contrary to the trend of the Italian bond yields in the 86% of the market trading hours, but that proportion has dropped to 69 percent since September.
According to the German Frankfurter Allgemeine Zeitung "reported that, to calm part of the euro-zone members of the opposition to the European central bank intervention in the bond market, the CMC of the ECB of the highest line every week to buy members of the national debt amount is limited to 20 billion euros. Although the ECB has repeatedly said it will not act as a European debt crisis "lender of last resort, but the current crisis situation, the market is still generally be regarded as the European debt crisis of the last and only" fireman ".In addition to seek outside support of the developed economies, the euro area is still the Group of Twenty (G20) summit held earlier this month in Cannes, France, on the the EFSF leveraged expansion of issues relating to the emerging economies for help. Although the parties failed to reach agreement, but Russia, Brazil, etc., have expressed their willingness to euro area by the IMF assistance.
ECB set to buy the debt ceiling
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reported that Germany has clearly opposed to the second program. In fact, the first scenario is also less in favor of, but now there is no other viable alternatives, the first scenario is relatively more support related negotiations may start soon, specific agreements are expected in the EU summit on December 9 announced.
Fitch said in a report released over the weekend, such as the Italian bond yields rise further, Fitch lowered the rating of the country. Citigroup recently European bond markets reflected investors that the euro area split of 25% probability.
In addition, World Bank President Robert Zoellick said on the 18th, such as the euro zone the European debt crisis response plans as soon as possible to reach agreement World Pipe network informed, then the United States may support the efforts of the euro area response to the crisis through the IMF. Zoellick said the euro zone is at a critical point, the debt crisis has begun to impact on the United States and other developed economies. He pointed out that the IMF can help support the euro system ", such as the euro area to launch a practical solution, then Australia, Canada and the United States will be happy to support, through the IMF to provide support.
"Frankfurter Allgemeine Zeitung" reported that, since the ECB to start in May 2010 bond purchase plan to buy the debt limit existed, but the upper limit has been shrouded in secrecy. According to ECB data, since May last year, the bank every week to buy bonds the amount of just over 20 billion euros a week, to restart in early August this year to buy bonds when the week. Since mid-September, the bank every week to buy the debt amount is less than 10 billion euros.
Nevertheless, within the euro area and the ECB for the differences of the bank to intervene in the bond market has always disappeared and has been enhanced. Except Germany, including the Netherlands and Austria have also questioned the actions of the ECB to buy big debt.
ECB has repeatedly expressed the hope that as soon as possible to get rid of this this should not bear the heavy responsibility to buy members of the national debt, but the debt crisis in Europe has been "kidnapped" the ECB dilemma. According to the Financial Times reported, on the 19th, the European central bank governor Mario Draghi strongly worded speech to the euro area countries in the implementation of emergency measures, as soon as possible to inhibit the spreading of the debt crisis in Europe. He criticized the delays in expansion plans of the European Financial Stability Fund (EFSF), warned that the ECB can make a contribution to solve the debt crisis in Europe is strictly limited and will not become countries of the "lender of last resort"; if to take ECB credit "bet" to pay a huge price in the European economic and social aspects.
It is reported that the ECB is considering the way the "Quxianjiuguo" to the International Monetary Fund (IMF) loans, the funds will be IMF to provide financial assistance for members of the euro-zone high debt.
Dow Jones Newswires reported, the short term, the ECB is likely to IMF loans, the IMF funds will be used to provide financial assistance to member governments of the euro-zone high debt. Reported that the IMF First Deputy Managing Director John Lipsky on the 19th did not deny the possibility of funding by the ECB, the IMF, the same day, he said in Frankfurt, "the IMF can borrow from any party, whether members or other central banks" .