ECB: don’t bother

29 Sep 2011

A rumoured second round of ECB bond purchasing has breathed life into what had been a dormant covered bond market — but don’t get too excited. Curiously, even with this week’s supply, September issuance is going to fall short of September 2008 when Lehman collapsed. That should tell you something.

At the time the last round of ECB covered buying commenced in May 2009, confidence was actually greater. Central banks had flooded the markets with liquidity, government guaranteed programmes were up and running and the senior unsecured market was showing signs of life. More importantly, the fiscal problems ...

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