Morgan Stanley put together a slide with a summary of all of the potential policy announcements by Mario Draghi at the ECB’s highly-anticipated September 6 meeting.
As always, the “potential impact” of a given policy seems highly correlated with the “hurdles to the decision,” but there are some outliers, like the ECB dealing with the seniority issue for government bonds held by the public sector:
Photo: Morgan Stanley
The policy action analysts and commentators seem to be expecting at this point is the “SMP and EFSF acting together” option. Morgan Stanley writes that the hurdles to this decision include that it’s “time-consuming,” because countries have to first apply for a sovereign bailout, then the ECB and EU have to “confirm that euro area financial stability is threatened.” After that, parties involved have to agree to a Memorandum of Understanding, and then parliaments have to vote on it.
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