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Obviously buying covered bonds but not sovereign bonds in the secondary market isn't a policy mix deliberately discriminating against some members and in favor of others.

Clearly the ECB is a purely supranational institution, and it is merely a coincidence that its decisions happen to consistently promote German interests and atavistic German hard-money neuroses.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Mar 15th, 2015 at 06:36:51 PM EST
[ Parent ]
Obviously buying covered bonds but not sovereign bonds in the secondary market isn't a policy mix deliberately discriminating against some members and in favor of others.

You missed the big program starting right now?

Somehow your view of the ECB is stuck in 2009.

"Clearly the ECB is a purely supranational institution,"

Yes, indeed. Weidmann hasn't won a vote since 2011 or so.

by IM on Sun Mar 15th, 2015 at 06:44:07 PM EST
[ Parent ]
No, I haven't missed any big program.

The ECB bought on the order of 1 % of all outstanding covered bonds over the course of less than two years. The piddling little Johnny-come-lately Securities Market Program amounted to less than a third of a percent of outstanding Treasury issues at its best, and was rolled out over two and a half years.

Size really does matter, and the ECB has been consistently undersizing its sovereign bond interventions.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Mar 15th, 2015 at 07:18:51 PM EST
[ Parent ]
Obviously buying covered bonds but not sovereign bonds in the secondary market isn't a policy mix deliberately discriminating against some members and in favor of others.
It's getting to the point where we should update your old dictum about bid-offer spreads to

"under German ideology public debt is toxic unless it's been sanitised by being repackaged by a Pfandbriefbank"

German rescue fund takes over Duesselhyp bank after Heta problems (Reuters, March 15, 2015)

The article, by the way, manages to avoid mentioning that preserving the sacrosanct risk-freeness of Pfandbriefe is the overarching policy objective here.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Migeru (migeru at eurotrib dot com) on Sun Mar 15th, 2015 at 06:46:38 PM EST
[ Parent ]
"The German banking association BdB, which runs the fund, is, however, not planning to wind down the bank, but wants to continue its operations."

That is not the ECB. It is not even a public institution.

by IM on Sun Mar 15th, 2015 at 06:59:55 PM EST
[ Parent ]

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