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You're conflating "national central banks" with "state-owned banks". There is no mention of the Bundesbank here. In fact, the Bundesbank and the ECB are washing their hands here.

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
by Migeru (migeru at eurotrib dot com) on Sat Feb 13th, 2010 at 06:12:02 AM EST
[ Parent ]
You are conflating the purchase of bonds and loan guarantees :-)

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Sat Feb 13th, 2010 at 06:28:58 AM EST
[ Parent ]
Upon checking German media, both are mentioned in connection with KfW, as alternatives.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Sat Feb 13th, 2010 at 06:31:41 AM EST
[ Parent ]
Anyway, nobody's talking about the ECB stepping in to curtail bond market volatility.

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
by Migeru (migeru at eurotrib dot com) on Sat Feb 13th, 2010 at 06:35:19 AM EST
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So? Does that justify your assertions that the ECB is going to do nothing? You yourself said operations on the secondary market could be carried out without publicity. Is it a good idea to give publicity to what might be done or what it is planned to do?

I'm not just thinking of the effect on the markets of an open declaration that one is going to intervene in the markets, but of the message as understood by other countries on the list the pundits have drawn up, and what knock-on effects that might have.

How the ECB will implement a policy of quantitative easing

purchases of government debt in the secondary market might interfere with the market's risk pricing mechanism, and might raise fears that the ECB is financing budget deficits
by afew (afew(a in a circle)eurotrib_dot_com) on Sat Feb 13th, 2010 at 07:04:36 AM EST
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Let's see, it is wrong that secondary-market purchase finance budget deficits. Now, even though it might raise fears because investors are ignorant or because of concern trolling.

As to purchases of government debt in the secondary market might interfere with the market's risk pricing mechanism, the market's "risk pricing mechanism" consists of secondary-market purchases. And a blind belief in the market's risk pricing mechanisms is precisely what brought on the crisis.

I'd like to see some statement by someone in a position of responsibility which is not framed in market worship.

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma

by Migeru (migeru at eurotrib dot com) on Sat Feb 13th, 2010 at 07:16:19 AM EST
[ Parent ]
Migeru:
I'd like to see some statement by someone in a position of responsibility which is not framed in market worship.

You would like to see the left running the show. So who won the EP elections, who governs most EU countries? What use is it pretending otherwise?

Migeru:

it is wrong that secondary-market purchase finance budget deficits

According to you, it's right?

by afew (afew(a in a circle)eurotrib_dot_com) on Sat Feb 13th, 2010 at 07:40:25 AM EST
[ Parent ]
I mean it is not the case that secondary market purchases finance the issuer.

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
by Migeru (migeru at eurotrib dot com) on Sat Feb 13th, 2010 at 07:46:16 AM EST
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Migeru:
In fact, the Bundesbank and the ECB are washing their hands here.

What evidence do you have for that?

As for the quote (which is a translation/paraphrase), it seems to me to separate bond purchases from "loan guarantees through KfW".

by afew (afew(a in a circle)eurotrib_dot_com) on Sat Feb 13th, 2010 at 06:57:23 AM EST
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Didn't see DoDo's comment before posting. But evidence that the ECB is washing its hands, I'd still like to see some other than your assertions.
by afew (afew(a in a circle)eurotrib_dot_com) on Sat Feb 13th, 2010 at 07:06:06 AM EST
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How about their own words?

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
by Migeru (migeru at eurotrib dot com) on Sat Feb 13th, 2010 at 07:09:16 AM EST
[ Parent ]

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