-Eurobonds Are Not A Crisis Management Tool
LONDON (MNI) – Greek banks will not run out of collateral because
policymakers can do what is needed to avoid this, Joerg Asmussen, a
member of the European Central Bank’s executive board, made clear in a
CNBC interview.
Asmussen also said he was opposed to Eurobonds as a crisis
management tool and saw them instead as an end product of fiscal union.
Asked about the risk of Greek banks running out of collateral
Asmussen said “We already have changed our collateral framework in the
past, we have allowed more assets to be used as collateral under strict
control of our risk management. We imposed haircuts. So I would not
speculate on future actions but I don’t see a risk that the Greek
banking sector runs out of collateral.”
In other remarks he said it was premature to say if the liquidity
the ECB has injected into the banking sector will feed through into the
real economy.
The ECB’s long-term refinancing operations, however, have been
successful as they “prevented a kind of credit crunch in parts of the
Eurozone,” easing banks’ refinancing, Asmussen said.
Regarding the inflation outlook, Asmussen said inflation would
only fall back below 2% early next year.
–London: +44 207 862 7491, drobinson@marketnews.com;
wwilkes@marketnews.com
[TOPICS: M$$EC$,M$X$$$]
