To most market participants, it should not be a surprise that today we had the type of comments by ECB’s Trichet on the risks associated with Greece contagion. We are constantly hearing the analogy to the US financial crisis and a Lehman event. Also, Trichet’s comments about the link between the sovereign debt and European banks should not be a surprise as this is the key factor in the crisis.
Governments can’t pay the debt, banks own the debt and the ECB has to decide to accept the debt as collateral. This is where the rubber meets the road and … …READ MORE
Tag Archives: US financial crisis
Greece and Trichet
US Crisis Lesson For Europe
As expected, the Bank of England left rates unchanged at 0.5% and the European Central Bank left rates unchanged at 1.0%. The BOE also signaled that they would not be expanding their QE program, but left open the option to buy more down the road should conditions change. We’re awaiting ECB’s Trichet to comment on Greece and the rest of the PIIGS to see if more will be done to assist them. Two of Greece’s largest unions are setting strike dates for February 10th and February 24th to protest the austerity proposals proposed by the government.
Of course, Greece is … …READ MORE
