ECB nu poate falimenta!

ECB nu poate falimenta! – 10 iulie 2015

Smaranda Dobrescu

"Since all national central banks contribute to the ECB, this increases the exposure of these central banks vis-à-vis the central bank engaging in the ELA. Does this mean that the other central banks – and most importantly, as far as Germany is concerned, the Bundesbank – risk 'losing money' as a result of the ELA (if, say, Greece goes bust)? Or, even worse, that the ECB risks defaulting? As for the first question, technically the answer is yes. But the mistake here – and I'm afraid that this is a common mistake among economists – is to assume that a central bank operates likes normal banks, or even worse like households. The point to understand is that a central bank – such as the ECB – cannot default because, simply put, it has the power to print its own currency. Here are some comments on the issue. The first one is by Paul De Grauwe:

A first thing to note is that a central bank cannot default as long as it has the monopoly power to issue money. Money is the 'debt' of the central bank but the central bank can redeem this 'debt' by issuing fresh money, i.e. by converting an old banknote into a new one. These banknotes do not constitute a claim on the assets of the central bank. As a result, the central bank does not need equity (in contrast to private companies). It can live perfectly with negative equity. As long as the central bank keeps its promise of price stability any amount of equity, positive or negative, is fine.

In other words, the ECB cannot 'run out of money'. This is what Christian Noyer, Governor of the French central bank, has to say on the issue:"

Cu alte cuvinte modelul american QE a dat roade. Tiparnita sa fie!

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  Octavian Lupu De acord doar ca tiparnita nu se afla la Atena si nici sub controlul grecilor. Daca Germania ar fi in suferinta atunci QE-ul ar deveni brusc foarte popular in UE.