FLASH BTP e Titoli di Stato: il giorno del rimbalzo?

tecnicamente ineccepibile, con possibile ulteriore aiuto oggi da parte delle ECB ??

European Views : Markets focusing on Italy and Spain: What are the options for policymakers?

With Italian and Spanish bond spreads widening substantially, market participants are starting to wonder what options remain for Euro-zone policymakers at this stage. The short answer is that a revival of the ECB’s securities markets program (SMP) is the only real option that would prevent a liquidity crisis for Spain and Italy. It is difficult to pinpoint the threshold at which the ECB would revive its SMP program, but we are convinced that the ECB will ultimately prevent any systemic event related to Spain or Italy, with the support of Euro-zone governments.

The following points are worth noting in this regard:

Reformed EFSF not ready yet. It will take a couple of weeks, or even months, before the EFSF can actually make use of its new powers, such as buying sovereign debt in the secondary market. The parliamentary process can be speeded up, but there are limits to how fast this process can be.

EFSF could lend money to governments, enabling them to buy their own debt in the market. What the EFSF could already do now in principle, however, is lend money either to Spain or Italy so that governments could start to buy debt themselves in the secondary market. Under current rules, such a loan from the EFSF would need to be accompanied by a program. However, this process could in principle be expedited, such that this option would become available in a matter of weeks. One drawback of this option is that a buy-back could be interpreted by some as an implicit attempt at a soft debt restructuring.

Even a reformed EFSF has insufficient lending capacity to cover Italy. Parliaments still need to approve the increase in the EFSF’s effective lending capacity to EUR440bn. But, even after that increase, and also taking into account the IMF’s and EFSM’s resources, the lending capacity would still be too small to provide Spain and Italy with a similar program to those for Ireland or Portugal (Italy’s financing needs until the end of 2013 are around EUR676bn). A further increase of the EFSF would be politically very difficult. Moreover, the ratings of the countries providing guarantees could eventually suffer as a result. Finally, one lesson that could be drawn from interventions in FX markets is that the overall amount available to intervene should remain unclear ex ante.

The ECB has unlimited fire power, in principle. Unlike the EFSF or governments, the ECB has no constraints on its ability to purchase sovereign debt. After all, it can create the money needed to buy these bonds at will. The ECB can – and has in the past – sterilise its purchases of sovereign debt, so that the liquidity in the banking sector, and hence the potential inflationary risks, remain contained. Note, however, that the ECB is currently conducting its repos in full allotment mode, implying that it does not control liquidity for banks anyway.

The ECB does not like buying bonds, as it does not want to fund governments – but things are different in a liquidity crisis where there is a risk of systemic events. Central bank independence and credibility are important pre-conditions for a successful monetary policy. Once central banks become too involved in funding governments, independence and credibility may suffer. This does not mean, however, that a central bank should not buy sovereign debt under any circumstances. After all, a central bank also has the function of a lender of last resort. Normally, that role is limited to supporting banks that face a sudden drying-up of liquidity. But in extreme scenarios, such as the current one, this role also refers to governments that face a liquidity crisis.Note in this respect that the EFSF, under the new arrangement, would start secondary market purchases only once the ECB would have declared a ‘state of emergency’ that would threaten the stability of the whole Euro-zone. If such circumstances were indeed to materialise, it would seem only legitimate that the ECB itself could also restart its SMP if the EFSF is not yet fully operational.

Non possiamo escluderlo. l’intervento ECB è necessario. E prese di posizioni forti (oltre alle cmq importanti parole di Juncker) sono attese… Speruma…

Dream Theater,

…con le speranze si rischia di fare una brutta fine….. non solo ci vuole l’intervento della ECB, ma le azioni per ridurre il debito Italia devono essere IMMEDIATE e PESANTI. Senza entrare in campo politico, ma personalizzando gli interventi indipendentemente dal colore dei partiti, mi sembra che l’unico che abbia capito la situazione sia stato Casini, che ha richiesto interventi immediati. Berlusca ha mancato, ancora una volta, a dare un messaggio che facesse prevedere nuovi interventi, se la situazione continua a deteriorarsi,
Bersani faceva meglio a stare zitto perchè, in questa situazione di difficoltà per tutto il paese, ha detto “andate avanti voi, che a me vien da ridere” (tanto per controbilanciare le sue continue e inutili battute).

CASINI ? chi è quello che era favorevole alle centrali nucleari ? è adesso propone tasse e patrimoniale a capocchiam ? MA COSTUI QUANDO MAI A LAVORATO ? BASTA CON QUESTA GENTE INETTA è INCAPACE A RISOLVERE NESSUN NODO DI QUEST’ITALIA! LA POLITICA NON PUO’ PROPORRE PATRIMONIALI ! FIN QUANDO NON SI TAGLIANO I FINANZAIMENTI PUBBLICI AI PARTITI ! GUARDATE CHE L’ITALIA NON è LA GRECIA , MA NON SI FINISCE CON TUMULTI ALL’ACQUA DI ROSE! VI RICORDO CHE IN ITALIA CI SONO OGIVE ATOMICHE, X CUI STESSERO IN CAMPANA ! 🙄 🙄 🙄

Nel frattempo, alla luce dei discorsoni di ieri, continuiamo a perdere il solito 2,3% mentre gli altri….sono sulla parita’. Che cattivoni gli speCULatori che se la prendono con noi italiani dalle basi solide… 😕

*TRICHET SAYS I DON’T EXCLUDE THAT ECB COULD BUY BONDS TODAY
-CRAIG STIRLING