The ECB should leave legacy ABS alone

By GlobalCapital
19 Jun 2014

Everyone knows that central banking is as much about posturing as taking action. With that in mind, European Central Bank president, Mario Draghi must be pleased that peripheral European ABS paper has tightened by about 20bp since his announcement two weeks ago that his employer would look into outright purchases of “simple and transparent” ABS.

His words have been the subject of many interpretations since he delivered them, as well as inciting plenty of speculation within the ECB itself. The actual substance of what will be done is now what needs to be determined.

Last week, Yves Mersch pointed out that the central ...

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