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Preliminary Thoughts about the ECB and Corporate Bonds
The targeted long-term repo operations had not even been launched when the ECB announced its intention to buy asset-backed securities and covered bonds. It then began to buy covered bonds before the conclusion of the Asset Quality Review and bank stress tests. This insistence on putting the proverbial cart before the horse fosters an environment that lends itself to speculation of even more measures. In addition, comments some official comments appear to express skepticism over the efficacy of current measures. This is different from the well-known German objections, which are rooted not so much in efficacy as in the ... (full story)