Daily: On the coming euro bank bailout

I just wrote up a post on Goldman's thoughts on coming ECB policy moves. Goldman's musings are credible because the author is their chief European economist, who was until a year ago at the top of the ECB's Monetary Policy Stance Division. And he worked at the ECB for ten years. So he knows what the ECB thinks about monetary policy as well as anyone outside the institution. His comments clarify a few things for me.
His view is that the ECB will not do spread targeting and will instead go for unlimited unsterilized purchases of shorter-duration sovereign debt. I agree.  I would also add that the ECB wants to reward peripherals that have Troika programs and stick to their targets. So those will be the sovereigns that get purchases. Ireland comes to mind since they have done well in their pr...


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