The outcome of the Aug. 2 European Central Bank meeting is “an important step forward for the common currency and for spreads,” Bank of Italy Governor Ignazio Visco told daily la Repubblica in an interview published today.
Deciding that the ECB “can and must intervene” to remove obstacles to the monetary union if there are risks for the euro is a “turning point,” Visco said.
There wasn’t “division” between policy makers at the meeting, just “discussion”, Visco said, adding that Bundesbank President Jens Weidmann expressed “well-known perplexities” regarding direct bond buying in the secondary market.
Asked why the ECB didn’t cut interest rates at the meeting, Visco said that if the economy continues to slow down “we can expect a more accomodating monetary policy in the next few months”.
“For the moment Italy doesn’t need to tap” the temporary European rescue fund, the Bank of Italy governor told the newspaper. “Monti is on the right track, but now he needs to speed up reforms,” he said. The economic emergency is not over, Visco told the daily, adding that 2013 will be “a year of recession” for the world economy.
http://www.bloomberg.com/news/2012-08-05/ecb-decision-is-step-forward-for-euro-visco-tells-repubblica.html
Wall St eyes protection against euro exit
Wall Street banks are increasingly telling counterparties and borrowers to restructure contracts or find another bank as they prepare for the potential exit of a country from the eurozone.
Using hedges, such as credit default swaps, US banks have reduced their net exposure to troubled eurozone countries. But they are also engaged in more work behind the scenes to ensure that if a country leaves the eurozone they will not have to receive payments in a devalued drachma or peseta.
http://tinyurl.com/8anzv8f
Posts
