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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (94100)	8/30/2012 6:30:51 AM
From: Haim R. Branisteanu	Respond to of 217551

Merkel Adviser: Unlimited ECB Bond Purchases Would Violate Mandate 30-Aug-2012 By Friedrich Geiger FRANKFURT--Lars Feld, an economic adviser to German Chancellor Angela Merkel, said late Wednesday he expects the European Central Bank to buy Spanish and Italian government debt only "bit by bit" in order to comply with its mandate and will thus have only a small impact on yields. "The ECB can't unpack the big bazooka. It doesn't have such a mandate," said Mr. Feld, a member of Ms. Merkel's council of economic advisers. Mr. Feld's comments may dampen hopes that government debt purchases by the ECB, as indicated by its President Mario Draghi, will bring down Spanish and Italian debt yields to sustainable levels. "The ECB can't act as a lender of last resort, this would be a breach of contract," said Feld, but "the ECB is growing into the role of a lender of last resort through bond purchases." Mr. Feld said he expects the German economy to stagnate or shrink slightly in the third and fourth quarter this year. Next year, Germany won't see a recession if the euro crisis is solved, but if it isn't, there could be a deeper recession, he said. Write to Friedrich Geiger