ECB, via the purchase plan: Dragons part by the French covered bonds – The Messenger

ECB, via the purchase plan: Dragons part by the French covered bonds – The Messenger

Take the purchase of covered bonds issued by the ECB. This morning, the first coat of Frankfurt has reached a handful god French bonds in the short term. It is the first move of the plan purchases of asset-backed securities that have certain value of low-risk announced by Mario Draghi to boost bank lending and stimulate inflation.

This is the first tranche of a stimulus plan that joins Tltro to auctions and anticipates the purchase of securitized loans (Abs). An operation to be spread over two years that may have “a potential universe of a thousand billion euro,” in the words of Dragons.

Of course, the markets expect some more details on the actual size of the operation, both Abs that in the case of covered bonds. But hope remains the market: investors are hoping that the measures announced by the ECB to contribute “to the return of inflation to a level close to 2%” end up preparing the ground to quantitative easing, or the purchase of public securities, model of the Fed. A street openly rejected by the Bundesbank, also contrary to an ACQUIRED of Abs that can “transfer risks from banks to taxpayers.”

 January 20, 2014 18:24 – Last Updated: 18:49

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