The variables which will influence the ECB’s coming monetisation

I am off again this week and doing short duty on the blog. But I want to say a few words about the ECB and its impending monetisation plans given Mario Draghi's decision to pull out of the Jackson Hole event sponsored by the Kansas City Fed. The FT has a good article outlining the variables which will influence those decisions. The key sticking points they outline are the following:

Convertibility or redenomination risk: this is the risk that Joerg Asmussen used as a premise for ECB intervention in his interview with the Frankfurter Rundschau last week. The thinking is that spreads have widened unacceptably in countries like Spain and Italy only because of redenomination risk. For example, the IMF reckons that the fundamentals in Spain and Italy would warrant spreads 200 basis points lowe...


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