This is really pretty incredible. It’s surprising to me that more people are not talking about this. While the headline reads all doom and gloom, if you read the article, the ECB just provided unlimited loans to banks and without question many of these if not all will be buyers of their country’s soverign debt. This is the defacto unlmiited support peple are calling for. I guess they may have to spell it out better.
The ECB is resisting pressure to increase its bond buying, saying governments need to find a lasting solution to the debt crisis. The central bank has instead focused on helping the banking sector and will this week offer financial institutions in the 17-nation euro area unlimited three-year loans. Draghi said it’s up to banks to decide what to do with the money.
“One of the things that they may do is to buy sovereign bonds,” he said. “But it is just one. And it is obviously not at all an equivalent to the ECB stepping-up bond buying. One aspiration is to have them financing the real economy, especially small- and medium-sized enterprises.”