–Monetary Policy Stance Still Accommodative; Double-Dip Unlikely
FRANKFURT (MNI) – Once the European Financial Stability Facility is
able to intervene in secondary bond markets, the European Central Bank
can end its bond purchases, ECB Governing Council member Yves Mersch
said in an interview with The Wall Street Journal released on Thursday.
“As soon as the EFSF receives the means it has been promised, then
there will be no reason for the ECB to be in the market. Compared to the
situation a year ago, the euro area is no more in an institutional
vacuum,” Mersch said.
“I think that the incoming ECB president ought not to be in the
same mode as the present one,” Mersch said, hinting that in his view
bond buys could be put to rest by November.
Mersch, who had been rumoured to have been one of the Council
members opposed to fresh bond market interventions, declined to reveal
his personal view. Instead, he confirmed that “we are now in the
implementation mode, and we stand by the decision taken by the
majority.”
The comments by governor of the Bank Luxembourg may not be well
received by markets that fear that the current size of the EFSF of E440
billion is not large enough now that the crisis has spread to Italy and
Spain.
Mersch, however, argued that “what is more important than a figure
or a number is that there is a lot of room that is left unoccupied by
the EFSF.”
“What is more important is the full political determination and
commitment that was expressed … that whatever would be needed would be
done,” he said.
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–Frankfurt bureau tel.: +49 69 720 142. Email: jtreeck@marketnews.com
[TOPICS: MT$$$$,M$$FX$,M$$EC$,M$X$$$,M$$CR$,MGX$$$]