tag:blogger.com,1999:blog-36227136.post6402509594187708898..comments2024-01-16T08:40:53.682+00:00Comments on <a href="http://www.openeurope.org.uk">Open Europe</a>: A peek inside the ECB’s toolkitOEhttp://www.blogger.com/profile/00556463374230498875noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-36227136.post-64197555761457673902014-01-29T11:23:41.049+00:002014-01-29T11:23:41.049+00:00Further to my comment above, I see that the German...Further to my comment above, I see that the German Constitutional Court may well rule that half of the "toolkit" might be illegal from a German perspective.<br /><br />Roll on the next phase of the Euro sovereign credit crunch.<br /><br />Welcome to the MananaZone, where nothing has been accomplished since 2008.<br /><br />Bob The Builder is better placed to deal with all of this than the EU.<br /><br />SCAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-36227136.post-71855335786233892412014-01-28T11:25:36.252+00:002014-01-28T11:25:36.252+00:00What is the point in having a toolkit if you are n...What is the point in having a toolkit if you are not allowed to use it?<br /><br />I would argue that Bob The Builder has a more effective toolkit (even though it is plastic) simply because he is allowed to use it.<br /><br />You could also argue that he understands finance better than the EU too.<br /><br />SCAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-36227136.post-36785111411546331672014-01-28T10:53:56.108+00:002014-01-28T10:53:56.108+00:00There is a reason why the level of securitisation ...There is a reason why the level of securitisation vary across Europe.<br /><br />Creditor rights vary a lot across Europe. The explanation is really that simple. If finance professionals had been aware of that fact then the financial crisis might not have been as bad as it turned out to be. Interesting to see that arguments are being made for repeating that mistake.<br /><br />The difference in creditor rights can be exemplified by how debtors behave:<br />Sell on credit in a country with strong creditor rights and you might get a call from a debtor asking for a rebate for early settlement of invoice, if payment is late then the debtor will pay late fees.<br />Sell on credit in a country with weak creditor rights and you might be stuck chasing the debtor for years and in the end you might need to offer a rebate to get any payment whatsoever.Jespernoreply@blogger.comtag:blogger.com,1999:blog-36227136.post-33777568710165964612014-01-27T16:55:08.925+00:002014-01-27T16:55:08.925+00:001. How anybody can think that no deflationpressure...1. How anybody can think that no deflationpressure and internal devaluation can go together is beyond me.<br />And mainly in the South which needs the monetary (or any other)stimulus most. These are still seperate markets for the largest part.<br /><br />You cannot reduce exportprices without reducing local prices at the same time in a monetary union.<br /><br />So either it is fighting deflation and let the internal devaluation last considerably longer or it is a (for EU and snails) fast internal devaluation and most likely some deflation with that. <br />People seem to forget as well that this are still largely national economies in a monetary union.<br /><br />2. Opportunities in the junkbondmarket (as that basically is what it will be) were there, but before any scheme is working they are with near certainty gone.<br />Products should have been developed much earlier. <br /><br />3. A proper credit rating will be nearly impossible to make. Unless there is real collateral. But companies with collateral unlikely even now have problems with borrowing.<br /><br />4. In Spain more than half the cies that have borrowed are unable to pay the interests due from their cash flow (not even to mentione repayments etc). This means 2 things:<br />a) they will simply not borrow even at favourable conditions;<br />b) lot of rubbish hidden everywhere. Few will like to have this in the open I presume (reserves/provisions look way too low). Put a credit agency on the job and you likely will get it.<br /><br />5. Anyway it takes too much time. Investors are now (unlike otherwise) waiting that things start to run again. Which basically means that consumption will pick up. (Not even mentioning unused capacity that has to be filled up first).<br />It simply doesnot, nowhere near a normalised situation even after 6-7 year.<br />Consumption or export will start, things up, if ever, not local investment. <br /><br />Riknoreply@blogger.com