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The buzz all weekend was the Der Spiegel report about the ECB planning to implement a scheme whereby peripheral borrowing costs would be capped in some manner.The report suggested that such a scheme could be unveiled at the ECB’s September 6 meeting.
The ECB just rejected that Der Spiegel report about a plan to cap sovereign bond yields.
Via Zerohedge are these headlines from Bloomberg:
- ECB SAYS BOND YIELD TARGETS HAVE NOT BEEN DISCUSSED BY THE COUNCIL.
- ABSOLUTELY MISLEADING TO REPORT ON DECISIONS NOT YET TAKEN
- WILL ADHERE STRICTLY TO ITS MANDATE
The comments were made in an email statement.
All that being said, you can parse these comments. First of all, “not been discussed by the council” may mean that it’s been discussed in an unofficial capacity. And since Draghi has said that high borrowing costs impede the ECB’s mandate, you could argue that spread targeting isn’t ruled out by “will adhere strictly to its mandate.”
And even the “absolutely misleading” headline, well… that’s awkwardly worded too, suggesting that any report about future decisions is misleading.
Meanwhile, Nomura presents 4 more reasons to be sceptical that the ECB will end the crisis in a wholesale basis like this.