ECB gets bailout approval from German constitutional court but it is only a formality from what they’ve already been doing recently


Well the ECB shouldn’t really have to celebrate the German constitutional court as it has already been engaged in bailing out some of the Belgian and Mediterranean banks.

The ECB’s Outright Monetary Transactions (OMT) program allows it to bail out struggling member states by buying their debt in unlimited quantities.

The FT wrote with respect to OMT, “The conditions include making sure the volume of any bond buying is [1]“limited from the outset”, [2]“purchases are not announced” and the ECB only hoovers up the securities of member states in “exceptional cases”[3]. 

Cynically I’d argue that [1] won’t be limited at all, [2] purchases not announced shows yet more obfuscation of markets (i.e. manipulation) and [3] member states in distress is not the exception but the norm!

Don’t forget the ECB balance sheet (assets) has trebled since the Global Financial Crisis to 3.2 trillion euro…and ECB ‘assets’ is a term I use very loosely.

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