European Central Bank will start spending it’s Trillion Euro QE to begin buying corporate debt (Suck it righties) in June.
Investment-grade corporate bonds issued in euros are the latest addition to a growing list of assets the ECB is buying as part of its 1.74 trillion euro effort (1.33 trillion pounds) to boost economic growth in the euro zone.
The ECB is hoping its money will eventually trickle down. (Suck it lefties) Since this is likely to take time, the ECB will increase the pace of its purchases only gradually and refrain from setting a monthly target.
The corporate debt in France and the Netherlands who already enjoy easy access to credit. Will acount for 57% of the QE. Once that money trickels down (Suck it lefties) to the medium-sized companies in Spain and Italy they hope to broaden the scope to bailing out them directly.
Creating this trickle-down effect will be crucial if the programme is to succeed and would address the criticism that it may simply supply more money to already well-funded companies that can borrow cheaply.
Since the annoucment of QE There was a 50% increase in euro-denominated bonds But activity was still concentrated in cash-rich countries. Issuers in Germany, Britain and France accounted for 70 percent of new bonds sold this year and there was little evidence of growing supply from peripheral countries.
All this on top of negative interest rates!!!!!!!!1
No one else is engaged in any kind of bail out but the EU.
In simple terms: The EU is spending debt to buy debt to keep the Euro zone looking like it is a float.
It like if a boat has a big hole then going to other other side and making a bigger one to fix it. Then hoping they will fix themselves in a few years.
If you are on the Euro you are going to pay for this. We probably are also.
For Greece the EU has just taken to paying their IMF bill and not asking them to pay their EU debts.
Although policymakers argue that getting (bad) banks to sell, wind down or transfer (bad) loans to a ‘bad bank’ must be done at national level due to differing regulations across the 19-member bloc, some analysts suggest the ECB could set targets for banks or at least issue best practice guidelines.
Things would actually benefit from a wave of consolidation (Of bad banks) as there are too many (Bad) banks in the bloc (So bigger bad banks). (Suck it everyone)