– Via the Quantitative easing of the European Central Bank. The Eurotower bought government bonds of Germany, France, Belgium, and also Italian. Then began the big injection of liquidity in the Eurozone with titles, mostly of state, at a rate of 60 billion Euros per month. The intention is to continue until September 2016 or until inflation will reverse the route. Bankitalia purchase securities for 130 billion.
Purchases Italian titles for 130 bn – The Bank of Italy will buy Italian government bonds, under the plan Qe of the ECB, to 130 billion euro. And ‘what informs the central institution that including operations carried out by the ECB total purchases of government bonds of our country will rise to about 150 billion. Arsenal from 1.14 trillion – The Arsenal fielded by Mario Draghi to achieve the goal is portentous: a potential 1,140 billion euro. Italy from Qe, according CGIA Mestre, should receive up to 150 billion euro.
This includes the Abs and bonds, and 12% is in securities of European institutions, but the bulk consists of public debt, and strictly only on the secondary market do not violate the prohibition of monetary financing. E ‘can also buy sovereign bonds with a negative return, but not below the ECB rate on deposits which currently amounts to -0.20%.
The markets respond well – The markets seem galvanized despite undermines Greek. The spread is below 90 points (the lowest since May 2010), the titles of the “periphery” are at historic lows of return and the euro below $ 1.10 to levels not seen in 11 years. It also sees positive premier, Matteo Renzi who stresses that for Italy, in the first quarter, GDP is likely to come back positive after dozens of negative readings.
The Qe concretely, here is the control tower – But what happens at this time? The Qe is divided between the Eurotower and the national (80% of the risk is carried by them) that carries the bulk of the purchases. There is hectic but it was still a weekend of work to make sure that the “machine” works perfectly. In Frankfurt there is a directorate called market operations, which includes about 180 people, which follows, analyzes and operates on bonds and cash. A team of about a dozen people, which belongs to the division “euro area bond markets”, technically making the Qe.
Frankfurt that closely monitors national institutes with continuous monitoring to ensure that they are implemented shares equal to the capital of each country in the ECB, will only purchase securities that have a maturity of between two and 30 years and with a rating of “investment grade”. Then cut off Greece until it is restored derogation on Greek bonds.
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