Follow Us

Follow us on Twitter  Follow us on LinkedIn
 

11 November 2011

Bloomberg: Silva says ECB as last-resort lender will end crisis


Portuguese President, Anibal Cavaco Silva, said that the European Central Bank can stop the spread of the continent's financial crisis with “foreseeable, unlimited” purchases of Italian and other government bonds.

“The European Central Bank has to go beyond a narrow interpretation of its mission and should be prepared for foreseeable intervention in the secondary market, not as the central bank has done up to now”, Cavaco Silva said yesterday in an interview at Bloomberg headquarters in New York. He said government leaders are unlikely to move fast enough to find solutions. ECB purchases in the secondary market “would stop speculation, would stop doubts about the future value of those Italian or Spanish or Portuguese or Irish bonds”, the president said. “The real firewall is in the European Central Bank.” He said the ECB won’t convince investors of its commitment if it continues “as the central bank has done up to now, saying ‘I don’t like it, but I’m forced to buy some Italian bonds’”.

ECB Governing Council member, Klaas Knot, of the Netherlands said yesterday the central bank can’t do “much more” to stem the 17-nation euro region’s debt crisis. Knot is the latest ECB policy-maker to signal the central bank is unwilling to ramp up its bond purchases significantly to calm financial markets. ECB Executive Board member, Peter Praet, of Belgium and council member, Jens Weidmann, of Germany have also said the ECB cannot legally buy bonds to bail out a debt-strapped Member State.

Full article



© Bloomberg


< Next Previous >
Key
 Hover over the blue highlighted text to view the acronym meaning
Hover over these icons for more information



Add new comment