Europe - ECB (May 08 - Dec 25)

[winston]

The European Central Bank more than tripled its bond purchases in the week to January 13 to calm market fears and halt the rise in yields, spending 3.77 billion euros compared with 1.1 billion the previous week, data showed on Monday.

However, the glimmer of hope which had emerged after solid bond auctions by Italy and Spain last week, and a view that the S&P move on ratings had been well telegraphed, helped steady market nerves though confidence could quickly ebb.


Source: Reuters

[kennynah]

1%

ECB maintained at 1% ... no change

[kennynah]

ECB chief Draghi will speak at 1330h GMT... his speech can sometime move eur/usd... headsup

[winston]

ECB prepares to open liquidity floodgates again by Simon Morgan

The European Central Bank is preparing to flood eurozone banks with cheap money again this week, in the second of two such operations, aimed at preventing a credit crunch in the euro area.

In an unprecedented move last December, the ECB announced it would lend as much as banks wanted at an ultra-low interest rate of 1.0 percent for a period of three years so as to keep credit flowing in Europe, at a time when banks are increasingly wary of lending to each other in the current debt crisis.

In the end, some 523 banks lined up to borrow a record 489.2 billion euros ($655 billion).

At the time, ECB chief Mario Draghi said that a second such three-year auction of funds -- known as a long-term refinancing operation or LTRO -- would be held on February 29 and he estimated that demand for the new cash would likely be just as strong.

Tensions in the banking system do indeed appear to have eased, borrowing costs for debt-wracked countries such as Spain and Italy have come down, stock markets across Europe have rallied and confidence is on the rise.

"It threatens to make banks in some countries dangerously dependent on ECB financing. Italian and Spanish banks now have five percent of their assets financed by the ECB and the more this rises, the more difficult it may be for banks to attract other financing," she said.


Source:AFP Global Edition

http://www.newsmeat.com/news/meat.php?a ... &buid=3281

[winston]

Signs of Big Trouble: Big Shift in ECB Balance Sheet

Tens of billions of funding support for European banks appears to have shifted to the emergency lending assistance program of the European Central Bank from the long-term refinancing operations, an indication that some European banks may be in dire financial straits, reports CNBC's John Carney.

http://www.economicpolicyjournal.com/20 ... n-ecb.html

[iam802]

Politics setting in..

--
ECB Must Print Euros Or Italy May Say ‘Ciao:’ Berlusconi

http://www.bloomberg.com/news/print/201 ... ao-1-.html

Former Premier Silvio Berlusconi said Italy should say “ciao, euro” if the European Central Bank doesn’t start printing money to tackle the debt crisis and Germany should quit the single currency if it won’t back a bolder role for ECB.

“The economic crisis can’t be solved” in Italy, Berlusconi said in comments posted on his party’s website today. He called on Prime Minister Mario Monti to “change his political line” and lobby European leaders to back a money- printing campaign by the Frankfurt-based ECB. If the central bank doesn’t become a “lender of last resort,” Italy should say “ciao, euro,” the former premier said.

The media tycoon-turned-politician became the latest European leaders to step up pressure on German Chancellor Angela Merkel and the ECB to permit a more aggressive response to the region’s debt crisis. Monti yesterday called on Merkel to drop her opposition to allowing the euro region’s rescue mechanism to lend directly to banks.

The 17-nation euro area “has a significant risk of breaking up” unless policy makers revamp the bloc’s fiscal and economic ties, Economic and Monetary Commissioner Olli Rehn said today in a speech in Helsinki. “We’re either headed for a deterioration of the euro area or a gradual strengthening of the European Union.”

‘Our Currency’

Berlusconi, 75, who resigned as premier in November as Italian borrowing costs surged amid a worsening debt crisis, said Italy should remain in the European Union even if it exits the euro. He added that another of his proposals was that the “Bank of Italy prints euros or our own currency.”

“It’s a crazy idea of mine,” he said, without specifying if he meant reviving the lira.

On May 25 Berlusconi, who heads the party with the most seats in the Rome-based parliament and whose support is crucial for Monti’s government, called for an overhaul of the country’s constitution to strengthen the powers of the president. He also said he would seek the office if his party requested him to.

[winston]

ECB may cut rates as eurozone crisis deepens by Simon Morgan

The European Central Bank may cut interest rates again soon as the eurozone debt crisis deepens, but it will continue to insist that it is up to governments to find a lasting solution, analysts say.

ECB watchers predict the central bank -- which will hold its regular policy-setting meeting next week on Wednesday instead of Thursday owing to a public holiday -- will not alter borrowing costs just yet this month.

But it could act in July as deepening fears about Greece and possible contagion to other countries push the 17 countries that share the euro back into recession, the analysts predicted.

Source:AFP Global Edition

http://www.newsmeat.com/news/meat.php?a ... &buid=3281

[winston]

ECB cuts benchmarkrate to 0.75%

[eauyong]

Marginal lending rate at 1.50%; Deposit rate at zero% from 0.25%.

[kennynah]

5/7/12 @1415hr gmt
draghi is now addressing a press conference

eur/usd tanks...