Not sure what exactly no “monetary” financing means, but I suspect it isn’t what the market was hoping for. Maybe they can continue to pretend to “sterilize” but this seems like he is stepping back. Did Germany spend an entire week saying the ECB was independent so they wouldn’t take all the blame for this?
Is it a co-incidence that Merkel is speaking at same time as an ECB press conference?
No cap on bond yields…the hits just keep on coming.
The easy path seems far less likely.
Providing liquidity to banks is the ECB’s job, and they did it (though I don’t see a big difference between “unlimited 3 year loans” and programs that increased in size every time needed and always rolled the debt). Will the liquidity really change the need or desire for banks to shrink their balance sheet? I doubt it.
The Fed’s ability to launch another round of QE hasn’t been helped by this stance either.