Showing posts with the label David Marsh - MarketWatch:

Santa Mario comes to town: David Marsh - MarketWatch:

By David Marsh , MarketWatch  LONDON (MarketWatch) — Mario Draghi, the European Central Bank president, has told the world there’s no way he can play Santa Claus to save the economic and monetary union this Christmas. In reality he’s giving away presents by the sackload, as shown by the 489 billion euro take-up of cheap three-year bank loans in Wednesday’s liquidity operations. Draghi’s justification for this action is perfectly legitimate. The ECB is not there to rescue governments. It’s the lender of last resort to the euro area banking system. However, the ECB taking risks that bring the central bank into new and dangerous territory. Is this quantitative easing (QE) by the backdoor? In a sense, yes. The ECB is exposing itself to massive amounts of collateral in the form of government bonds issued by the weaker EMU members. Although the bonds have not been bought outright, as has been the case in the Bank of England and Fede