Main » 2011 » December » 26 » $3.2 trillion debt
7:01 AM $3.2 trillion debt |
| Many people have been worried about the fed's "bubble" burst. This is because since the round after the financial crisis, the bank through constant toxic securities, such as national debt purchase, the balance sheet will be the total scale to expand the $2.9 trillion. But now you should be more worried about the European central bank, this is not only because of its balance sheet total dimensions as much as $3.2 trillion, more in 30 times as much leverage already back in 2008 when lehman crisis peak. Insufficient funds or buy debt limit according to bloomberg material to show, at present the lever of the European central bank has already reached the level of 30 times, even more than the 2008 financial crisis peak. Earlier this year, the lever level was only stay in 23 times or so. To this, OpenEurope think-tank, said the European Wholesale MLB hats central bank in the euro zone countries risk open the problem has reached 705 billion euros ($), this summer has ascension is nearly 60%. Now, the market for its credit ability and independence are sceptical. The European central bank balance sheet scale, why in such a short time has soared? The answer is in the purchase debt. In fact, because of concerns that Treasury yields rose too quickly, the central bank in the past year 1 keep buying Treasury bonds member states. Data shows, sheet is the last week, the bank bought total 3.36 billion euros national debt. And since beginning May 2010, its purchase of Treasury bonds has total debt kingdom's more than 211 billion euros. However, the central bank and not to buy unlimited down, this is because Germany has been expanding the scale of the bank for that debt. And just this week, the European central bank governor Jim also publicly admitted Della, has no intention of improving bought debt of scale. So, if the central bank can control the balance sheet expansion rate, the risk and where is it? The daily economic news the reporter understands, because the European central bank to buy national debt at the same time in failed to attract enough deposit, can't balance set off the current purchased sovereign bond. The data shows, the European central bank deposit for 194.2 billion euros ($), need to enter the scale of bonds is 203.5 billion euro, this means that close to 10 billion euros sterilisation gap. In this way, the European central bank will have to higher funds rate to the euro area bank to withdraw funds, forcing Banks to increase financing cost. Overseas analysts say that the ECB gap for the write-off of risk, and may lead to its securities market plan (SMP) was forced to end. Inflation fears into nightmare is worth mentioning, the European central bank currently close to 30 times the leverage ratio does not necessarily lead to bankruptcy. The senior economists TeunisBrosens ING said, the New Era Hats ECB hold a lot of euro national debt, some of these are of default risk. But the central bank, after all, different from commercial Banks, on the issue of the bankruptcy need special treatment. Due to the different from before the gold standard period, the bank shall not converted to cash or other assets gold, when central Banks need money, just need to put money went, so in theory, won't go bankrupt. But this does not mean that it won't create and trouble, inflation may be a serious consequences. According to the European central bank to buy national debt behavior, the German government economic adviser group leader WalfgangFanz had severe attack says, this is a serious mistake. Historical experience prove that will national debt is the central bank of the monetized committed one fatal mistake. This will not only make the central bank independence, and the risk of inflation. Of course, now come to, because financial expenditure and credit both drop, the eurozone has not too much inflation risk, but is deflation risk to get the upper hand. This October, the eurozone CPI final value rose 3% at an annual rate, and as expected. October CPI final value rose 0.3% on rate only. |
|
|
| Total comments: 0 | |