‘DNB president Knot disagree with ECB decision’ – AD.nl

'DNB president Knot disagree with ECB decision' – AD.nl

DNB president Klaas Knot has not agreed today with the decision of the European Central Bank (ECB) to put in the purchase of government bonds as a weapon against the low inflation in the eurozone. The Telegraph reported that according to insiders.

Knot would along with four other ECB directors have not been agreed with the new stimulus. In addition, over the next year and a half is about 1,100 billion pumped into the European economy, primarily through the purchase of government bonds.
ECB President Mario Draghi in a note that within the support for the plan ECB governance was so obvious that no formal vote was needed to see if a majority agreed. However, he also said that there was no unanimous support. In addition, he called the usual names of opponents.

In addition to Knot went according to The Telegraph, the Germans Jens Weidmann and Sabine Lautenschläger, the Estonian Ardo Hansson and the Austrian Ewald Nowotny. Their opposition would have shown their contribution to the meeting.

Less ‘firepower’
the announced buy-back program of government bonds, the ECB cuts its possible according to experts in the fingers . For the decision, a compromise was needed, so that national governments carry a large proportion of the risks.

According to the Tilburg economics professor Harald Benink this reduces the “firepower” of the ECB in future bailouts.
In 2012, ECB President Mario Draghi announced the so-called OMT program. That means that if a country is in trouble and therefore can not borrow more money, can help shoot the ECB bonds of that country to buy.

Up to now, this has never been necessary. But the remark that he ,, Draghi will do everything ” to prop up the euro gave financial markets when needed rest. Now it seems, however, that if the ECB buys bonds, the risk shall come again largely lie with the respective governments.

Promotion
,, So if Italy gets into trouble, the risk of the bailout is

again the Italian government, ” argues Benink. The OMT program is thus in his perception has become less powerful. The idea behind the new measures is that the ECB pumped money into the European economy to stimulate it and thus inflation in the euro zone.

To what extent this succeeds depends, according to the professor, especially on where the money from the central bank enters. If through the buy-back program for example especially government bonds to pension funds are bought away, the money stays in the financial world.

,, then be bought shares in particular, and that makes no sense. “” But
Benink has the impression that the ECB Thursday also has opened the possibility to stabbing money into European institutions as the European Investment Bank (EIB). In that case there throughout

Relief at the fair
European stock markets closed today with hefty profits. In the last trading session dominated relief at the decision of the ECB.

Especially in the first hour after the decision, which was announced at 14.30, investors were upset because the benefits of the additional support will become clear in due course. The AEX index closed 1.5 percent higher at 447.77 points and the MidCap rose 0.8 percent to 658.29 points.

The leading indices in Frankfurt, London and Paris won between 1 and 1.5 percent. The ECB draws for the next year and a half billion euros in 1100 to mainly to lending and inflation in the eurozone hunt.

Several market participants reported that the amount is higher than expected, but at the same time stated that the will of governments to reform will be crucial in achieving the desired effects.

The euro fell after the step of the ECB sharply in value. The single currency was traded for $ 1.1429, up from $ 1.1595 at the close of the European markets on Wednesday.