Sunday, November 13, 2011

Europe's reluctant savior

According to CNNMoney reports the European Central Bank is under pressure to step up its bond-buying program as borrowing costs for Italy rise to dangerously high levels. But experts say the ECB, which has already bought billions of euros worth of government debt, remains reluctant to ride to the rescue.

Global financial markets rebounded amid speculation the ECB could announce unlimited bond buying at an emergency meeting, even as bank officials sought to tamp down the rumors. ECB officials have said repeatedly that the bond-buying program is a temporary measure to ensure that its monetary policies are effective in an environment where markets are dysfunctional.

Mario Draghi, the former Italian central banker who became ECB president earlier this month, has questioned the reasoning of an open-ended commitment to buy government bonds.

"What makes you think becoming the lender of last resort for governments is actually the thing you need to keep the eurozone together?" Draghi said cryptically in a press conference last week….

Find out more at http://money.cnn.com/2011/11/10/news/international/ecb_italy_bond_buying/index.htm?iid=SF_BN_MPM

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