Yields higher, but yesterday by Merkel words to defend the independence of the ECB – Reuters

Earnings rise, but yesterday by Merkel words to defend the independence of the ECB

          

Earnings rising sovereign debt of the Eurozone in the late morning. The spread BTP / Bund stands at 123 basis points and yields a return of BTP Italian ten-year increased by 3 basis points to 1.46% while the yield of the corresponding Bund German marks an increase of 2 basis points to 0.23 percent. Rising one basis point also the return of the ‘ Oat French, which leads to 0.56%, while the yield of the Bono Iberian margin was up 2 basis points to 1.58 percent.

Yesterday, the ECB maintained its expansionary monetary policy to bring inflation to the target path of a next level but less than 2% (inflation harmonized HICP recorded at 0.0% in March Eurostat and down 0.2% in February).
Supplied details on corporate bond purchases that will support the plan purchase of assets (government bonds and parastatal companies) from 80 billion a month in place.

Draghi, however, also stressed the independence of the ECB strongly emphasizing that it obeys the European treaties and not to politicians, adding that interventions that harm the perception of independence markets the central bank’s only likely to prolong the maneuvers of the Eurotower in view of the objectives assigned to it by the Treaties.

The words of Draghi came after criticism from the German Finance Minister Wolfgang Schauble who had openly put into question the monetary policy of the European Central Bank in an official speech to the IMF international last April 16.
Schauble had in particular said: “The effectiveness of the extraordinary political and ultra-low interest rates is questioned and we should be very careful with the negative effects they have on financial stability.”
Schauble had also added that the banks have to redesign their business models to improve its profitability in an environment of low interest rates and digital evolution. “A further mutualisation of banking risks, for example by means of a common European framework for the protection of deposits, should not be taken into consideration”, he also said the minister of the German economy.

An important part of the speech yesterday Draghi responded precisely to these notes in mind that in the States the low interest rates have lasted (and last) by a much longer period of the European market without that US banks have failed (you are indeed strengthened in many cases).
As for the profitability of banks and insurance endangered by low rates, Draghi also recalled the lavish capital gains on assets that these individuals are strong sellers and which were and are purchased by the ECB with the purchase plan active.
The theme of ‘ European banking integration , however, remains one of the highest points of friction. In fact, the single scheme of protection for deposits up to 100 thousand euro in Europe is one of the most important steps in that direction as the same unitary Draghi has taken place more emphasis as one of the pre- the most important conditions for the consolidation of the EU financial system and market confidence.

Yesterday has nevertheless ended with a victory for the Dragons who cashed by German Chancellor Angela Merkel a defending independence of the ECB and the underlining of compliance by Berlin of the EU treaties (although in the legitimate right to different opinions on specific issues).

On the other hand even Jens Weidmann , the president of the Bundesbank (and member of Governing Council of the ECB), which has often criticized the monetary policy of the same Eurotower, had defended, after Schauble’s words and the growth of the debate on rates in Germany, the independence of the ECB and with it the European Treaties.

(GD)