The ECB released what looks to me like an important document on Friday. In response to a February 26 Communication from the European Commission, it sets out the ECB’s recommended guidelines on “asset support schemes”, i.e. over-priced purchases of impaired assets by the state or under-priced state insurance of these assets. I have described my objections to these proposals a number of times and won’t go into them again here. A quick look at the ECB document didn’t reveal anything that made me more convinced of the merits of these proposals (though I may report back after I’ve had a bit more time to read the document in detail).
In the Irish context, my concern is that the EU and ECB documents seem likely to convince the government that these schemes should be pursued. However, there are other ways to go about dealing with our banking problems and a broader debate needs to be had than simply focusing on the details of how asset support schemes should be implemented.