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26 Apr 2013
Forex Flash: ECB independence undermined? – Deutsche Bank
FXstreet.com (Barcelona) - Overnight, the Bundesbank has provided a written opinion, dated December 21st, to the German Constitutional Court detailing a series of objections to the ECB's OMT program. The article, which cites a pre-published report from Handelsblatt, says that the objections include a potential worsening in credit risks on the ECB's balance sheet from sovereign bond purchases and an undermining of the independence of the ECB.
According to Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank, “Other objections from the German central bank include doubts that strong conditionality will be imposed on countries who apply for the OMT program.” The Bundesbank's opinion is part of a submission linked to a case to be heard in June by the Constitutional Court against the establishment of the European Stability Mechanism.
The comments come after Merkel told a banking conference yesterday that the ECB is in a difficult situation because it would probably have to "increase interest rates for Germany a bit", but for other euro members "it would actually need to do more to make sure that liquidity is available to firms".
According to Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank, “Other objections from the German central bank include doubts that strong conditionality will be imposed on countries who apply for the OMT program.” The Bundesbank's opinion is part of a submission linked to a case to be heard in June by the Constitutional Court against the establishment of the European Stability Mechanism.
The comments come after Merkel told a banking conference yesterday that the ECB is in a difficult situation because it would probably have to "increase interest rates for Germany a bit", but for other euro members "it would actually need to do more to make sure that liquidity is available to firms".