ECB and Bundesbank head with some choice comments

  • Governing councils decison to wait was over uncertainty of the path of inflation
  • ECB proposes maturities of EZ bonds be automatically extended if issuing country applies for rescue money
  • Printing money to fight unemployment ends with higher inflation and higher unemployment
  • Over the long term monetary policy can not go against the will of the people in democratic states
  • Our compass is and remains orientated toward stability
  • ECB gov council will need steadfastness in future to normalise mon pol, raise rates again
  • EU, Eurosystem crisis measures have not made monetary union more durably stable
  • Necessary to eliminate economic links between banks and EZ member states

The bolded comment is perhaps the most noteworthy. Given the arguments that surrounded the Greek bond rollovers and haircuts, it looks like the ECB is looking to lock in some additional insurance ahead of any other crises.

Ryan Littlestone

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