Portuguese president:"The real fire wall is in the ECB"

Discussion in 'Wall St. News' started by ASusilovic, Nov 11, 2011.

  1. The European Central Bank can stop the spread of the continent’s financial crisis with “foreseeable, unlimited” purchases of Italian and other government bonds, Portuguese President Anibal Cavaco Silva said.

    “The European Central Bank has to go beyond a narrow interpretation of its mission” and buy bonds in the secondary market, Cavaco Silva said yesterday in an interview at Bloomberg headquarters in New York. He said government leaders are unlikely to move fast enough to find solutions.

    “It has to be able to be a lender of last resort,” said Cavaco Silva, 72, who as Portugal’s prime minister presided over the 1992 signing of the Maastricht Treaty, which cleared the way for the euro common currency. “It has to be a foreseeable, unlimited intervention.”

    Italian 10-year bond yields this week climbed to a euro-era record of 7.48 percent, surging past the 7 percent level that led Greece, Ireland and Portugal to seek international bailouts. The Italian 10-year yields fell below 7 percent yesterday after a successful auction of one-year bills.

    ECB purchases in the secondary market “would stop speculation, would stop doubts about the future value of those Italian or Spanish or Portuguese or Irish bonds,” the president said. “The real firewall is in the European Central Bank.”