Markets looked positive after a G20 communique pledged support for the ailing eurozone.
A recent tumble in the DAX and CAC 40, however, suggests that this early enthusiasm might be beginning to wear off.
In the communique — released after a dinner meeting on Thursday — the group stated (via IFP), “We commit to take all necessary actions to preserve the stability of banking systems and financial markets as required.” According to the note, this would include “actions to increase the flexibility of the EFSF and to maximise its impact.”
U.S. officials have previously suggested leveraging the EFSF in order to expand its balance sheet. French Finance Minister Francois Baroin also used the word “leverage” when speaking to reporters.
However, any dream of euroTALF remains tempered — G20 leaders will not discuss any specific plans until next month.
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