Posts Tagged ‘Lib-Dems’

Notes From Underground: ECB agrees to accept all dogs and junk

May 3, 2010

In an effort to ensure against a solvency crisis in the EU, the European Central Bank has agreed to accept all levels of Greek and other sovereign debt regardless of its investment rating. Greek debt that has been downgraded to junk status is being readily accepted at the ECB lending facility and no haircut on the value is being taken. The next step is for Trichet and company to actually start purchasing sovereign debt in what would be a move for quantitative easing. The ECB is not there yet but by accepting Greek debt as collateral, the ECB is one step away from total abdication of its role as the defender of the EURO.