“To the extent that the size of the these sovereign premia hamper the functioning of the monetary policy transmission channel, they come within our mandate…Within our mandate, the ECB is ready to do whatever it takes to preserve the euro…and believe me, it will be enough,” said ECB Pres Mario Draghi at around 6am at a UK investor conference. On the heels of Nowotny’s comments yesterday that he’s open to discussing giving the ESM a bank license, we’re seeing another instance of central bankers trying to save the day with the threat of their printing machine. Whenever Draghi talks about ‘policy transmission’ being hampered, it’s his Morse code for restarting their bond buying program.
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