Nama Bonds at the ECB

Was it a mistake for the Irish government to use a clever ploy to “park” Nama bonds at the ECB?  Was it the non-standard use of the ECB’s temporary liquidity facility as a source of long-term bank sector funding that led the ECB this week to demand an Irish debt restructuring?  Or should the ECB have accepted that they needed to provide long-term risk capital to the Irish banking sector in this non-standard way, as part of their role as euro-area lender of last resort?

 

As Brian Lenihan has repeatedly and correctly stated, bank asset purchase schemes, like Nama, are an accepted route to restoring bank sector stability, and can be successful.  The US TARP programme was successful, and so it seems was the Bank of England’s programme.  The theory behind troubled-bank asset purchase schemes is widely accepted and market-tested.   

 

There are two core problems in the Irish case.  One, Nama was a poorly constructed asset-purchase programme, which seemed more like a debt relief plan for politically-connected developers than a genuine, open and honest, bank-sector restructuring plan. 

 

Two, the idea behind these schemes is that the government (or rather, the taxpayer) provides long-term risk capital to banks by purchasing risky, long-term bank assets in exchange for cash.  The government (taxpayer) has a long horizon and is not liquidity constrained or risk-constrained like the banks.  This transaction crystallizes the losses of the banks and avoids dysfunctional bank behaviour associated with an overhang of excessively risky long-term assets like bad property development loans. But given the contemporary fiscal situation, the Irish government in 2009 did not have a lot of available liquidity, nor did it have the ability to provide a big infusion of long-term risk capital.  An asset purchase scheme requires the government to absorb and hold the risk from the banks’ assets.  The Irish government did not have the capacity to absorb and hold that risk and so it was not really capable on itw own of implementing an asset purchase programme.

 

The government came up with a clever alternative to providing the banks with solely Irish taxpayer risk capital.  At least, I thought it was a clever alternative, and I was an opponent of Nama.  The government issued non-tradeable Nama bonds to the banks in exchange for their troubled assets, and arranged with the ECB that the banks could take these Nama bonds to the ECB repurchase facility and use them as collateral for borrowed cash.  So in essence the banks got their cash in place of troubled assets. 

 

The problem is that the ECB is sharing the risk capital allocation with the Irish government.  The Nama bonds are Irish-government guaranteed, but that is no longer an AAA-promise.  If the banks default on their repurchase, and the government defaults on its bond guarantee, then the ECB is at risk of big losses.  Should the ECB be willing to absorb that risk or does that go beyond its remit?

 

 

 

 

 

 

 

 

 

58 replies on “Nama Bonds at the ECB”

The ECB has every right to say it will not absorb the risk. But what is wrong is that the ECB should be one of the three key players effectively telling Ireland what to do at the same time as it has a direct financial interest.
Suppose that the best soultion for Ireland were a default by the state or the banks? Given its risk of loss, does anyone think the ECB would recommend Ireland take that course?
The ECB should recuse itself from the talks.

@ Gregory Connor

If Ireland unilaterally withdraws the guarantee on NAMA bonds how can the ECB retaliate?

Can they refuse to continue normal ECB activities to Permanent TSB?

I may be wrong here but I dont beleive the banks have gone to the ECB with these Bonds. Also the repo price was never at par it was circa 98% for one year term. Not sure what the price is now or if the offer is stil there. It was informal in anycase I beleive.

The role of the ECB seems unlike any “central bank” I’ve every read about. Krugman recently compared (as have others) the Texas Savings and Loans crisis to Irelands situation. Can you imagine Texas being told to tap up the IMF by the Fed? “Eh, sorry lads, not my problem, have you spoken to China recently?”

The miserable political fallout of this is that there is no European project. Blood is in the water. This crisis was the EUs chance to pull together, like any decent rowing team, but no, we lost the narrative, lost rhythm, and we’re back in coxless pairs.

This should be the ECBs and ONLY the ECBs competence. It should have been involved from the start, before the Lehman crisis, before the ‘night of the thieves’ convinced Cowen to cover Anglos blushes and certainly before Greece.

No message, no consensus, no solidarity, Have the ECBs hierarchy offered their resignations yet? Why would anyone want to invest in the European project with the drivers asleep at the wheel.

United we stand indeed.

The ECBs actions or lack of them only makes sense to me if they had made a gentlemans agreement that Ireland will reenter the BOE / FED sphere of influence.
We are at the centre of action here and it looks like the ECB has conceded a tactical retreat.

Fiscal policies of Countries has nothing to do with the ECB (in theory until this crisis). They only care about monetary policy. It is up to the EU to solve the sovereign crisis, not the ECB though they have to be involved.

@ Gregory

If you’re right, should the ECB not have been aware of the NAMA bond implication long before this? The stated intention of repoing the bonds with the ECB was well flagged and discussed.

The ECB needs to act like a proper central bank – it just needs to write off the shadow bank debt and to protect the core treasuries and itself from loss by bidding up its non debt based assets.

Simple really – they need to destroy debt in a epic bonfire of the vanities.

Of course the ECB seems to be representing these debt interests and not goverment treasuries.

The ECB don’t have a problem with the NAMA bonds. They were involved in their design. The ECB have a problem with the continuing reliance on them for funding though. The assumed that Irish banks would have had access to capital markets including the option of repoing the NAMA bonds with counterparties. That hasn’t happened. The ECB are right to be warning against the continuing reliance on them but they are a Central Bank. They are a lender of last resort so while not ideal, they are just doing what they are supposed to. Of course they don’t want the risk on their balance sheet though (they are one of the most under capitalised banks in the world I would say!)

@Enda.
Yes their real job is protect their client banks – but I seem to remember Milton Friedman state that a central bank could preform its basic functions by being a single desk inside the treasury.

@ Enda F

But why do the Fed / BOE / every central bank in every crisis since the flood do it then?

Or is your argument why do anything?

Extraordinary times / extraordinary measures and quite frankly I think the ECB has been very very ordinary. Politically stitched up perhaps, but very ordinary.

The fact that our central bank (ie the ECB) is threatening to (effectively) not accept our sovereign debt at the discount window during an emerging bank run demonstrates the fundamental problems with the eurozone project

This is simple guys.
The Central banks are there primarily to protect the interest of large Bondholders and to make sure they get burned as little as possible. Protecting citizens from dire social hardship is not even on their radar.
It takes a crisis for this to become obvious.
Even when it does become obvios people seem bamboozled.

@Furry Cactus

Multiplie media reports indicate that a large proportion of Nama bonds have been repo’d to the ECB. Not sure if that has been officially confirmed by the ECB or in bank’s accounts, nor what the total amount is at the ECB. Yes of course there is a haircut cost of borrowing for this repo facility.

@ Andrew S Says

This should be the ECBs and ONLY the ECBs competence. It should have been involved from the start, before the Lehman crisis, before the ‘night of the thieves’ convinced Cowen to cover Anglos blushes and certainly before Greece.

No message, no consensus, no solidarity,

We have yet to contribute to the EU budget after almost 40 years and net receipts of over €40bn at an annual average of 3% of GDP.

Obviously you haven’t heard of the onset of the credit crunch and massive emergency liquidity provided from 2007.

As for Krugman and Texas, we had independence in the fiscal area including taxes.

That was the system we voluntarily joined; when we were the beggars on horseback, we hadn’t much interest in solidarity had we?

@Micheal Hennigan
Not all contributions are of a monetory nature – the loss of the Irish fishery industry comes to mind.

The fault lies entirely with our leaders, specifically Cowen and Lenihan.

Immediately after the guarantee, they should have called the Europeans in, moved the army in to secure the documents in all the banks, took the bankers passports and launched a joint investigation with the ECB to get at the truth.

@Andrew S Krugman recently compared (as have others) the Texas Savings and Loans crisis to Irelands situation. Can you imagine Texas being told to tap up the IMF by the Fed? “Eh, sorry lads, not my problem, have you spoken to China recently?”

Turn it around… Can you imagine if during theTexas crisis, the matter was left in the hands of the local sherrif and the Federal Authorities were deliberately misinformed as to the state of events in order to facilitate fraud by the insiders in Texas?

The government, in siding with the fraudsters, have put the country in the position it is in with our European partners

From the NAMA hearing at the Committee for Public Accounts this morning

NAMA bonds are initially secured on loans and property which the European Commission is auditing and certifying – they approved Tranche 1 in August 2010 and NAMA expect EC approval of T2 shortly. So State guarantee apart you would have expected NAMA bonds to be repo-able.

NAMA believes that NAMA Bonds have been used as collateral for part of the €100bn lending to Irish guaranteed banks at the end of October, 2010.

@ Garry,

The fault lies with Charlie McCreevy.

There is a plan to have our own annual “bonfire night” or “Charlie McCreevy Night”.

Instead of the English chant of
“Remember remember the 5th November” for their “Guy Fawkes Night”,

the Irish will chant
“Remember remember the 5th December”,

for it was on the 5th December 2001 when McCreevy undid the Bacon reports and created the conditions for greed and collapse.

The NAMA / repo strategy smacked of cute hoorism from the get-go. Irish repos at the ECB now constitute a quarter of ECB repo lending and 78% of Irish GDP – we are the piss-takers of first resort. We funded a long-term program (NAMA) with short term loans which were designed to be phased out- setting ourselves up for failure. In the process, we’ve grossly abused the ECB’s lender of last resort function and hamstrung the ECB’s operations.

Lobbing brickbats at the ECB is merely jingoism – this problem is designed and manufactured in Ireland and the buck stops here.

@ Gregory Conor

As you say nothing has been confirmed and I have seen no clear details from the ECB in relation to the repo option. I have heard stuff like the minister was told this but nothing in writing. I am not saying that the ECB have, will or are not going to honour it, but it is a means by which the banks may assign a valuation to the Bonds….

@The Other Andrew

The ECB overlooked and / or endorsed the production of credit aggregates through the agent of the shadow banking sector.

When you produce credit over the long-term growth rate of the economy then that is plain criminality for as sure as night follows day this debt will cause a recession / depression.
meanwhile it used the 3% deficit rule to reduce and counter any competion to its friends virtual monopoly on debt creation.

The sad pathetic actions of the Irish executive is merely the logical outcome of this monetory heroin unleashed on naive souls.

NAMA that beast invented by Lenihan is going to blow up in a few years whatever happens. They were just another way of getting the ECB to pay for junk bonds.

Just think about it, in the extremely unlikely event that NAMA makes money it will immediately land in court. Do you think the junior bondholders in Anglo, AIB and BofI all of whom had to take haircuts are going to stand ideally by while NAMA cashes its bn euro check. The only assets they had to support there bonds was taken from them by the state in the full knowledge that the underlying asset was worth more than the discount, in fact Greenie ministers at the time trumpted how NAMA was going to make money. I could write the writ myself and would win, you can’t do that even a gombeen would recognise that.

In the much more likely event that NAMA loses buckets of money all it has achieved is a raid on the ECB at huge cost. A tralee full of accountants and barristers will have moved some deeds from one branch of the government the banks to another the secretative NAMA HQ. An economic non-event but a costly bureaucratic fest that would put Soviet Russia to shame.

As with every move by this administration they completely ignore sound economic advice and plough on talking about secrative advisors.

I also notice today that the Greenies have started trick or tweating again. That does mean that there latest Easter Island project has been given the silent nod. The clean up team from the IMF wont be impressed

@Micheal Hennigan

You will not get any argument from me regarding the nature of this mutant economy.
Its fiscal and monetory distortions have been huge and is a indeed a caricature of a functioning economy.
Indeed in some respects it is not unlike the US economy where local industry is hollowed out by inflowing bits of paper.

@Michael

I saw that comment from Cowan. Amazing. Of course we should be ashamed and humiliated that we allowed our Country to be destroyed by this Country’s so called political (all parties) and business leaders as well as other vested interest groups.
Someone should ask him why he isn’t ashamed and humilated. Suppose it would have been all different if Lehman Brothers hadn’t gone.

@Micheal
I recommend you take a trip down to Castletownbere – it is now surrounded by ridiculously large trophy houses with little fishing and no processing.
The nature of fiscal and monetory transmissions have done great damage to our society and local industry starting with the first agricultural land boom and bungalow bliss of the late 70s.
Sure we made a shit load of money but little wealth – now we do not know how to add wealth however modest we were before the EU expansion.

@Michael
from your finfacts posting

“…..Meanwhile, German Chancellor Angela Merkel today restated her determination that private investors should contribute to the costs of a future Eurozone bailout but stressed that this applied to future rescues only from 2013.

“We in the federal government are absolutely convinced it is necessary that creditors contribute to the cost in any future, and I underline ‘future’ three times so that the markets understand – mechanism,” said Merkel….. ”

Who is Angela Merkel addressing these comments to?
Possibly, those continental banks that lent to Irish banks without looking too closely at what the Irish banks were doing with such funds?
Or have I missed something?

Enda F

I think it fair to point out that not every political party & business leader is equally to blame. Labour, FG, SF and the micro left share some small portion of blame. Its FF and its quisling client groups in the TU and IBEC along with regulators, bank stakeholders that bear most of the blame.

If this is as you say, why are Nama not releasing the assets onto the market regardless what value they are marked to now.
They then will at least have some floor outside themselves. At the moment NAMA is acting as buyer of last resort, but it pitched itself at a level that is way to high. So it is worth its while to allow 15% of the assets go in a fire sale. That would at least put a real floor under the remainder.
So what if they make a loss at least there would be some trade. I believe this is what should have happened with the banks anyway.

@Tull
Any organisation exposed to such a epic wall of money will be corrupted by it.
FF gave a disproportionate amount of the bounty to the builders and their foot soldiers , Labour if in power would have given even more money to the middle class and less to the builders , FG to the merchant class.

Capital would have been burned to sustain consumption anyhow – Politics is just a amusing diversion.

Keith,

you are correct up to a point. All govts everywhere look after their friends. However up until the last 10 years, there was a point at which all parties baulked, with the exception of 1977-81. However, the last 10 years saw an orgy of hedonism on the part of FF and their cronies in the public sector unions & the crony capitalists around Anglo. All of this was carried on with the blessings of Fr Sean.

@Keith
“Politics is just a amusing diversion.”
That is what the powerful (public and private, elected and appointed) would want us to believe.

We are now living with the results of politics as entertainment at the same level of say sport or circuses (with some bread) – something which we can spectate, but on which we have no influence apart from elections.

We now have to find a way to recast our government by ensursing that there are checks and balances that limit the scope for excess by the powerful (public and private, elected and appointed) so that our government is both moderate and competent. It is easily said, but it ain’t done simply.

We could start by repealing the 2003 Freedom of Information Act, see here http://politicalreform.ie/2010/06/21/freedom-of-information-and-corruption/

Yes it was disgusting – but it may be the final eulogy to using credit as the only unit of account and we happened to be at the focus of two currency flows from both America and Europe – until our banking masters change the rules of the game – game theory will compel people to use it or lose it and waste our lives trying to survive by gaming the CBs

to be honest I think it has turned out well. The parking of NAMA bonds with the ECB was fine -until the downgrades. Those downgrades were ultimately a product of the guarantee (no matter what people say about the structural deficit). They were bound to come someday, but we were able to shift some of the risk to the ECJ before they did. However, now the ECJ is organising to use the combined fiscal might of the Eurozone to back us up, which should improve our credit rating again, suiting them and us.

It’s essentially similar to the guarantee we gave to the banks, costless in theory -but I think this time it will work. Ireland is a better bet than Anglo Irish bank.

I’m all in favour of a loan facility. I’m even optimistic that we might never need to use it.

@Donal
Politics is a waste of time if politicians are solely reliant on debt to sustain their electoral dreams.
For God sake man its been two years+ and they haven’t set up a Independent bank yet.
This is the worst of all worlds – banks can create credit and destroy it without reference to money – the whole construction is beyond farcical.

I realise we needed a loan but this is only a short term fix we really need debt forgiveness, inflation or just cash.

What will happen the 110 bn ECB facility is being replaced by an IMF/Euro/UK loan at about 5%.

An additional 5 bn a year in interest payments. I suppose they could add that on to the mortgage rates!

“As Brian Lenihan has repeatedly and correctly stated, bank asset purchase schemes, like Nama, are an accepted route to restoring bank sector stability, and can be successful. The US TARP programme was successful, and so it seems was the Bank of England’s programme. The theory behind troubled-bank asset purchase schemes is widely accepted and market-tested.”
Ah Mr. Connor. If it canards like a duck…

TARP purchased a tiny amount of assets. Mostly it did preferred equity injections ( http://economic-legislation.blogspot.com/2010/11/troubled-asset-relief-program-tarp.html ).

The Bank of England purchased high quality assets as part of a QE program:
“In January 2009, the Chancellor of the Exchequer authorised the Bank to set up an Asset Purchase Facility (APF) to buy high-quality assets financed by the issue of Treasury bills and the DMO’s cash management operations. The aim of the Facility was to improve liquidity in credit markets.”
It also set up a SLS to provide a private repo mechanism for otherwise toxic debt structures.
It did not purchase toxic debt structures.

Few have successfully bought troubled assets. It was already considered a failed effort in the US before TARP was even passed, hence the change to direct capital injections. The BoE, as far as I can see, did not even try it. It was a failed ideology. Resolution is the solution for failed banks, not transfusions.

Maybe quack, quack, oops.

The state/taxpayer was never at risk in the NAMA scheme, if only because there is no firm date for redemption of the bonds.

They were wrirtten and presented to the ECB in either a fradulent or ignorant manner…either our officials did not understand ECB repo mechanisms or they did and fooled the ECB (and our banks)

As I have said before in this blog, you should study the Term Sheet for the NAMA bonds. There is no capacity to redeem them “at maturity” and there is no firm commitment to ever redeem them other than for more bonds.

So, our government “guarantee” for these bonds is actually a guarantee of nothing. I figure it took a few months for the ECB to twig this and one can imagine how angry they now are. The reslkt is we are driven into the IMP, in truth.

Its an outrageous scandal, and a very severe embarrassment for Ireland–and no journalists have picked it up. I have written about it before:

http://brianodoherty.ie/wp/featured/2010/10/a-good-nama-and-a-bad-nama/
http://brianodoherty.ie/wp/featured/2010/11/nama-cant-afford-to-redeem-its-own-bonds/
http://brianodoherty.ie/wp/featured/2010/11/stop-committing-economic-suicide..-as-follows/
http://brianodoherty.ie/wp/featured/2010/11/unwind-nama-and-let-the-ecb-off-the-hook/

Ths State should now return their property to the banks. Given the present facts, the NAMA scheme is theft of private property by the State.

The state/taxpayer was never at risk in the NAMA scheme, if only because there is no firm date for redemption of the bonds.

They were written and presented to the ECB in either a fraudulent or ignorant manner…either our officials did not understand ECB repo mechanisms or they did and fooled the ECB (and our banks)

As I have said before in this blog, you should study the Term Sheet for the NAMA bonds. There is no capacity to redeem them “at maturity” and there is no firm commitment to ever redeem them other than for more bonds.

So, our government “guarantee” for these bonds is actually a guarantee of nothing. I figure it took a few months for the ECB to twig this and one can imagine how angry they now are. The result is we are driven into the IMP, in truth.

Its an outrageous scandal, and a very severe embarrassment for Ireland–and no journalists have picked it up. I have written about it before:

http://brianodoherty.ie/wp/featured/2010/10/a-good-nama-and-a-bad-nama/
http://brianodoherty.ie/wp/featured/2010/11/nama-cant-afford-to-redeem-its-own-bonds/
http://brianodoherty.ie/wp/featured/2010/11/stop-committing-economic-suicide..-as-follows/
http://brianodoherty.ie/wp/featured/2010/11/unwind-nama-and-let-the-ecb-off-the-hook/

The State should now return their property to the banks. Given the present facts, the NAMA scheme is theft of private property by the State.

The state/taxpayer was never at risk in the NAMA scheme, if only because there is no firm date for redemption of the bonds.

They were written and presented to the ECB in either a fraudulent or ignorant manner…either our officials did not understand ECB repo mechanisms or they did and fooled the ECB (and our banks)

As I have said before in this blog, you should study the Term Sheet for the NAMA bonds. There is no capacity to redeem them “at maturity” and there is no firm commitment to ever redeem them other than for more bonds.

So, our government “guarantee” for these bonds is actually a guarantee of nothing. I figure it took a few months for the ECB to twig this and one can imagine how angry they now are. The result is we are driven into the IMP, in truth.

Its an outrageous scandal, and a very severe embarrassment for Ireland–and no journalists have picked it up. I have written about it before:

http://brianodoherty.ie/wp/featured/2010/10/a-good-nama-and-a-bad-nama/
http://brianodoherty.ie/wp/featured/2010/11/nama-cant-afford-to-redeem-its-own-bonds/
http://brianodoherty.ie/wp/featured/2010/11/unwind-nama-and-let-the-ecb-off-the-hook/

The State should now return their property to the banks. Given the present facts, the NAMA scheme is theft of private property by the State.

I have submitted my comment here, three times–with minor alterations in text–but each time the blog seems to refuse to publish it. Some technical problem at the blog–not at my end, because your Word press software did acknowledge receipt.

Now that my comment at 11.37 was published, I’ll try the otrher one again:
”
The state/taxpayer was never at risk in the NAMA scheme, if only because there is no firm date for redemption of the bonds.

They were written and presented to the ECB in either a fraudulent or ignorant manner…either our officials did not understand ECB repo mechanisms or they did and fooled the ECB (and our banks)

As I have said before in this blog, you should study the Term Sheet for the NAMA bonds. There is no capacity to redeem them “at maturity” and there is no firm commitment to ever redeem them other than for more bonds.

So, our government “guarantee” for these bonds is actually a guarantee of nothing. I figure it took a few months for the ECB to twig this and one can imagine how angry they now are. The result is we are driven into the IMP, in truth.

Its an outrageous scandal, and a very severe embarrassment for Ireland–and no journalists have picked it up. I have written about it before:

http://brianodoherty.ie/wp/featured/2010/10/a-good-nama-and-a-bad-nama/
http://brianodoherty.ie/wp/featured/2010/11/unwind-nama-and-let-the-ecb-off-the-hook/

The State should now return their property to the banks. Given the present facts, the NAMA scheme is theft of private property by the State.
“

testing again…it seems my message must not include that word, the issuer of these bonds, which have caused us so much embarassment at the ECB that we find ourselves marched into the IMP. Scandalous!
The guarantee bbehind them is technically a guarantee of redemption at no particular redemption date.
The property must now be retuirned to the banks.
I have written about this a lot in my own blog and in this forum too.

@Brian O’Doherty and other commentors

If you submit a comment with a hyperlink, please wait awhile for it to appear. As I understand it, there is an automatic process which must run, to check the hyperlink for “spam” problems. No need to re-submit the comment, it is just necessary to wait long enough for it to be checked. It can take a fair interval of time.

“Market participants are giddy today on the great news that Ireland will go deeper in debt in a foolish attempt to bail out the German and UK bondholders who were in turn foolish enough to lend ridiculous amounts of money to Irish banks in various real estate schemes.”

Michael Shedlock ……

I don’t think he appreciates the ins and outs fully, as he charcterizes NAMA as a bad bank, 75% accurate. Also he does not credit that this GFC and depression were foreseen by some of the key players.

But it does read well!

I think the default option exists, with or without an exit from the EZ. With the present crew in charge, and all that gravy for their less astute offspring, I doubt we will get an unbiased decision. Once the managers are captured they can chivvy the shareholders into the right pen. OPM and agency problem writ large. Sovereignty: “shure dems only words”

Andrew S Says:
November 18th, 2010 at 2:25 pm

Correct! They were asleep at the wheel. They should have been aware that the Irish regulator was in league with the banks. Failures can be costly! Aclean out due there, too?

@ Gregory Connor, and other readers

Apologies again for the irritation of having to scroll thru my comment submitted multiple times
I have submitted hyperlinks before, with no delays…but perhaps this time the 4 hyperlinks was excessive. …I will note for the future

[Aside: I think we found on previous occasions that a Comment with one link would get through straight away but two or more would cause a delay. That seemed to accord with my own experience with WordPress.]

bjg

@Connor

“As Brian Lenihan has repeatedly and correctly stated, bank asset purchase schemes, like Nama, are an accepted route to restoring bank sector stability, and can be successful”

Wow Mr. Lenihan said something that was correct. That has to be a first, has the media caught on to it.

Maybe the IMF team could give him some sweets and a silver star.

You never know with a bit of encouragement he might learn how to add.

ANGLO sub debt meeting #1 has passed by the way. All the spin from the subbies has amounted to nothing, which is exactly as i said it would!

The reason the ECB got into this mess is that it followed its usual instincts and tried to cover up the crisis when it started. In both the US and the UK the government/central bank took on bad debt and government debt to get liquidity into the system. This was an open transfer of risk. It may be unfair, but at least it was clear.
The ECB refused to liquefy the system because of its obsessive hatred of easing monetary policy. Instead, it allowed banks to hide the size of their problems by borrowing from it against bond assets sometimes of very dubious worth. Now the ECB wants out of the mess it caused and it doesn’t care who it hurts in the process.

Comments are closed.