Thursday, June 25, 2015

Jens Weidmann, boss of the Bundesbank, wants the opposite of debt relief for Greece. Really.

Jens Weidmann, boss of the Bundesbank, wants to restrict the power of the Greek central bank to provide Emergency Liquidity Assitance (ELA) to the Greek banks as he is afraid that Greek banks will use these reserves to purchase short-term government debt....
True colors. The black flag of piracy. Restrict liquidity to force insolvency. This is the opposite of what modern central banking is designed for.


NeilW said...

If Greek Banks want to buy short term government debt then what concern is that of the Bundesbank. That is a commercial decision for the bank in question.

The job of the ECB is to maintain the payments system - and if that means backing off every deposit in the Greek banking system then that is what it is tasked with doing.

If he's worried about things then he should be putting pressure on the ECB, etc. to conclude a deal with Greece and remove the uncertainty.

Schofield said...

Yet another German Neo-Conservative in denial that the human race is eusocial. First we want you to go into debt with us so that we can foist our over-capacity on you and then when you show signs of being unable to repay we will force you into bankruptcy! The sociologist Nigel Dodds has it about right in this web article that eusociality is the key issue to be addressed in the Eurozone:-