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The Big Fat Ecb Cockup Thread

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http://uk.reuters.com/article/2013/05/08/uk-ecb-loans-idUKBRE94700620130508

The European Central Bank is looking into buying bad loans from southern Europe to relieve the pressure on banks in crisis-stricken countries, the German newspaper Die Welt reported.

The ECB wants to revive asset-backed securities (ABS) which allow banks to pass at least some of the credit risk on to other investors as they try to boost their capital and liquidity buffers to adapt to new regulatory standards - one reason for their reluctance to lend.

In an advance copy of a report due to be published on Wednesday, Die Welt said the ECB not only wanted to improve the framework for asset-backed securities but, citing central bank sources, said the ECB's Governing Council was also discussing whether the central bank could itself buy these securities.

Excellent news. This is clearly going to fix the problem....

Edited by interestrateripoff

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ECB says has tools left to act if needed

The European Central Bank still has room to manoeuvre should the euro zone economy continue to worsen after it cut interest rates to a new record low last week, ECB policymakers said on Wednesday.

The ECB cut its main rate to 0.5 percent last Thursday.

Yves Mersch, a member of the ECB's six-man Executive Board, said the bank still had tools at its disposal, but added that it could only spur lending to small euro zone companies in conjunction with other European institutions.

Then we have this.

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http://uk.reuters.com/article/2013/05/08/uk-ecb-assetbuys-mersch-idUKBRE9470NM20130508

The European Central Bank will not subsidise markets with asset purchases, ECB policymaker Yves Mersch said on Wednesday.

The ECB said last week it had set up a task force with the European Investment Bank (EIB) to assess ways to unblock lending to SMEs, for example by promoting a market for asset-backed securities (ABS) based on SME loans.

German newspaper Die Welt, citing a central bank source, reported in its Wednesday edition that a majority of ECB Governing Council members seemed to be in favour of the central bank buying ABSs itself.

"We will not subsidise markets, we will not overtake markets, that is not the task of monetary policy," Mersch said, adding that he is more sceptical about buying assets than ECB lending operations.

"We will be sure not to overstep our mandate," he said in a panel discussion in the northern German town of Aachen.

And then to finish we have this.

So does this mean they are going to make asset purchases to prop up the markets?

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http://uk.reuters.com/article/2013/05/09/uk-bundesbanks-weidmann-ecb-idUKBRE9480HW20130509

Bundesbank chief Jens Weidmann said the ECB is still able to take policy action to address the euro zone crisis even after cutting its main interest rate last week, a German newspaper reported on Thursday.

The European Central Bank cut its benchmark rate to 0.5 percent last Thursday and its President Mario Draghi has since said it would monitor incoming data closely and be ready to cut rates further, including the deposit rate currently at zero.

Asked if the ECB had fired its last cartridge, Weidmann told the Westdeutsche Allgemeine Zeitung: "Monetary policy is still capable of action. There is no doubt that we must keep an eye on the risks of negative real interest rates."

Lots of noise about the ECB currently.

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"Asked if the ECB had fired its last cartridge, Weidmann told the Westdeutsche Allgemeine Zeitung: "Monetary policy is still capable of action" " :lol:

When they are loudly saying that they "still have tools", you just know that time is nearly up on the EZ. How will the break-up be announced I wonder?

Edited by dances with sheeple

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ECB's Visco: Deposit Rates Could Go Below Zero

European Central Bank governing council member Ignazio Visco told CNBC that the central bank is "technically prepared" to introduce negative deposit rates which would see banks effectively having to pay the ECB to hold deposits, but was aware of the potential "unintended consequences" of such a move............

"We all agreed in the council that we have to look with care and in that case we may reduce the [deposit] rate. We think that - and I personally think that, this is effective – the economy now is capable of taking it on board. Technically, we are equipped and ready to intervene. There may be unintended consequences - we know we may have to work on that - and we know how to work on that," Visco told CNBC on the sidelines of the Group of Seven (G7) meeting in London this weekend......

http://www.cnbc.com/id/100730472

So the position has changed from outright denial to "unlikely". Probably by the end of the summer we'll be at the "likely" phase.

If by economy he meant stock markets then I'm sure they're more than capable of taking it on board! I can't see the bull market easing with this on the horizon.

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I say, get rid of the ECB,and let the banks compete in the full knowledge that no-one is going to buy their crap, no-one is going to bail them, and they are going to have to REALLY earn their bonuses.

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http://uk.reuters.com/article/2013/05/17/uk-ecb-asmussen-banking-union-idUKBRE94G0B320130517

European Central Bank Executive Board member Joerg Asmussen said on Friday that he believed a single European banking supervisor could be in place by next summer.

He said that it would not, however, be possible to set up a banking union without resolution.

"A supervisor which cannot credibly close a bank because it doesn't know what will happen then is a like a tiger without teeth," he said at an event for foreign journalists in Berlin.

"We need all elements of a banking union - we need them on the level of a common instrument and I also think that we can do that by next summer if we work hard."

Excellent news, yet another supervisor job up for grabs.

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http://uk.reuters.com/article/2013/05/17/uk-ecb-credit-coeure-idUKBRE94G09R20130517

The European Central Bank's monetary policy will stay accommodative for "quite a long time", European Central Bank Executive Board member Benoit Coeure said on Friday.

The ECB was committed to providing the euro zone with abundant liquidity for as long as necessary, Coeure also told a conference in Orleans.

"We are saying that because we are well aware that rigidities and difficulties of transmission in the euro zone mean that the monetary policy will have to stay accommodative for quite a long time," he added at a conference in Orleans.

Indefinitely then!

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http://uk.reuters.com/article/2013/05/22/uk-ecb-praet-deleveraging-idUKBRE94L12S20130522

The European Central Bank must be careful that deleveraging by euro zone banks does not affect the economy such that inflation drops too low, ECB Executive Board member Peter Praet said on Wednesday.

"We have to be very attentive that the balance sheet adjustment doesn't lead to macro conditions that will put pressure on the downside of price stability," Praet, who is in charge of the economics portfolio on the ECB's six-member executive board, told a conference in Washington.

Can't have deleveraging in a debt crisis.

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http://uk.reuters.com/article/2013/05/29/uk-ecb-constancio-negativerate-idUKBRE94S0U220130529

The European Central Bank has not yet decided whether to cut into negative territory the deposit rate it pays commercial banks for holding their money overnight, ECB Vice-President Vitor Constancio said on Wednesday.

"This is a very difficult issue -- to analyse the pros and cons. No decision has been taken," Constancio told reporters, adding that the ECB had done a lot of analysis on the issue.

"Logistically we are even ready for that," he said, adding that if the ECB were to go ahead with the move, banks would have to have advance notice to prepare themselves.

If someone does go negative it's going to get very interesting.

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ECB's Draghi says euro zone on track for "very gradual" recovery

The euro zone economy is on track for a recovery later this year driven by the European Central Bank's loose monetary policy and demand from abroad, the bank's President Mario Draghi said.

The ECB cut interest rates to a new record low in May and said it would act again if necessary but its hand may in part be stayed this month and going forward by a rebound in inflation, which rose back to 1.4 percent in May from 1.2 percent in April.

That is still way below the bank's roughly 2 percent target and unemployment in the euro zone reached a fresh high in April at 12.2 percent, fuelling further calls for policymakers to do more to help the economy.

"The economic situation in the euro area remains challenging but there are a few signs of a possible stabilisation, and our baseline scenario continues to be one of a very gradual recovery starting in the latter part of this year," Draghi said in the text of a speech prepared for the International Monetary Conference in Shanghai.

Very gradual = stagnation?

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http://www.guardian.co.uk/business/2013/jun/06/ecb-eurozone-recession-deepen

The European Central Bank has predicted a deeper than expected slump in the eurozone economy as its president, Mario Draghi, said the institution had discussed negative interest rates in a bid to kickstart growth.

The ECB said the economy of the euro's 17 members will shrink by 0.6% this year compared with the previous forecast of a 0.5% decline. However, the bank was more optimistic about 2014, inching up its growth forecast from 1% to 1.1%.

Draghi also reiterated that ECB is considering unconventional policies, such as charging banks interest on deposits, in order to force them to offload money and lend to small companies.

How unexpected.... Luckily we aren't aiming for an export led recovery...

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http://www.telegraph.co.uk/finance/financialcrisis/10104691/Hard-line-ECB-washes-hands-of-jobless-crisis-sees-no-Japanese-deflation.html

Mario Draghi, the ECB’s president, said the wild moves in currencies and global stock markets over the past two weeks do not change the fundamental picture, though the bank has downgraded its economic forecasts and expects a deeper contraction of 0.6pc this year. “It is not enough to justify immediate action,” he said.

“The ECB seems to have given up. It is as if they have decided that there is not much more they can do and will simply allow events to run their course,” said David Owen from Jefferies Fixed Income.

Clearly that won't happen, this is central planning by central bankers they can't help but to interfere and make the problem worse.

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The Eurozone cannot use the tricks used by Britain, USA and Japan. They have no choice but to let the bubble deflate and rebuild a real economy. It will be a few years of pain, then the EZ will come out stronger, possibly losing some pieces like Greece, Ireland or Italy.

Meanwhile back here in a couple of years the Pound will be irrelevant and inflation will skyrocket.

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The Eurozone cannot use the tricks used by Britain, USA and Japan. They have no choice but to let the bubble deflate and rebuild a real economy. It will be a few years of pain, then the EZ will come out stronger, possibly losing some pieces like Greece, Ireland or Italy.

Meanwhile back here in a couple of years the Pound will be irrelevant and inflation will skyrocket.

..it might work if they all drop out and go their own way ...Germany for one will benefit....instead of picking up the tab for countries not committed to the cause ..only to their own greed and what they can get out of it...a la France etc etc.... :rolleyes:

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The ECB have obviously got the wrong idea. To get an economic recovery they need to invest in property as this is a proven route to success. Any money printing should be directed at increasing European house prices to fall into line with the UK.

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..it might work if they all drop out and go their own way ...Germany for one will benefit....instead of picking up the tab for countries not committed to the cause ..only to their own greed and what they can get out of it...a la France etc etc.... :rolleyes:

And of course Germany would keep their current (relatively) low exchange rate wouldn't they?

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http://uk.reuters.com/article/2013/06/07/uk-italy-draghi-idUKBRE95612E20130607

European Central Bank President Mario Draghi was "a little misunderstood" on Thursday and is not planning on tightening monetary policy, Italian Economy Minister Fabrizio Saccomanni said on Friday.

Saccomanni's comments come after the ECB left interest rates unchanged on Thursday and said that he did not yet see the need for unconventional financing measures to lift growth.

"The markets interpreted some messages from the Federal Reserve to be that we are heading towards a phase of monetary tightening, and maybe the failure to reduce rates (by the ECB) was interpreted as a confirmation," Saccomanni said at a business conference in Florence.

"But I believe that in this case he was a bit misunderstood," said Saccomanni, who worked under Draghi at the Bank of Italy.

Saccomanni said Draghi had indicated he was "willing to take more expansive measures".

Short-term money market interest rates rose on Thursday after the ECB decision and Draghi's comments.

Investors had been pricing in a deposit rate in negative territory, which would effectively charge banks for parking money at the ECB and help kick start lending to businesses and consumers.

"There is international consensus on the fact that we have yet to exit this crisis," Saccomanni said.

That last sentence is dangerously off message???

Great to here that Draghi clearly is willing to print his way out of trouble and this time it will be different...

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http://uk.reuters.com/article/2013/06/13/uk-ecb-mersch-idUKBRE95C10U20130613

European Central Bank Executive Board member Yves Mersch said on Thursday price pressure in the euro zone will remain subdued as the currency bloc is slowly recovering.

Speaking at a seminar in Copenhagen, Mersch said the ECB had not run out of options yet and would deploy suitable tools if necessary.

"The ECB has not run out of ammunition. We can employ more tools and measures whenever they will be needed," Mersch said in the text of a speech.

"As capacity utilisation is low and the economic recovery is expected to be slow, we expect price pressure to remain subdued. Inflation expectations are well anchored," he said.

So they expect no recovery and expect inflation to take hold...

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http://uk.reuters.com/article/2013/06/13/uk-ecb-weidmann-idUKBRE95C14R20130613

Central banks independence is currently increasingly under threat and central banks are partly to blame for the situation, European Central Bank Governing Council member Jens Weidmann said on Thursday.

Central banks meddling in fiscal policy weakens their ability to take care of their main task of keeping inflation low, he added, a day after a round of hearings to the ECB's bond-buying programme ended at the German constitutional court.

Central bank independence was compromised the minute they started bailing out national banks and funding deficit spending.

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  • 243 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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