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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.
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
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"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
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