The Banking and Strategy Initiative

Chillin' out till it needs to be funded

ECB will keep monetary stance accomodative (More EUR 1 Tln firepower from the ECB?) | Insight Europe

ECB

Image by AlphaTangoBravo / Adam Baker via Flickr

Further rate cuts are not really an option though market economists believe a possibility of the same in March or April after the disorderly Greek default(Tom Vosa, Head of Market Economics on Reuters Insider) . Not an option for ECB because it will have to by the Economists own admission fund ECB to the rest of the year after the debt is repaid in February. However there are other options also before we discuss the rate cuts as a stimulus:

1. The falling yields at new option may stop midway and start up ahead of the February business for Italy] and accelerated later when Greece options fall apart and ECB directly funds Greece and others in the commotion

2. The Capital Gap is hardly left to the tune of Euro 10 bln in France and similar amounts for Deutsche Bank and ,many others by March if assets are still notsold, allowing banks to shop around for a buyer and the right price.

coming back to the rate cuts, I think the two Central Banks kept their monetarily accomodative stance adequately while maintaining the right floor for interest rates in that region and they should no ttry and disturb that floor of expectations.

 

 

Enhanced by Zemanta

One comment on “ECB will keep monetary stance accomodative (More EUR 1 Tln firepower from the ECB?) | Insight Europe

  1. Pingback: Europe: Getting used to it? Though it’s $1 Tln now ( at your friendly neighbourhood ECB ‘branch’) | The Banking and Strategy Initiative

Comments are closed.

Information

This entry was posted on January 13, 2012 by in Amitonomics, Europe, Global, US and tagged , , , .

Archives

%d bloggers like this: