Monday, February 18, 2013

Currency Wars Continue

After European Central Bank President Mario Draghi's speech at the European Parliament on Monday, he responded as follows to questions from parliamentarians:
"Another sign of improved confidence is the larger than expected early repayment by counterparties in the first of our two three-year longer-term refinancing operations settled in December 2011 and March 2012. This indicates that banks are less uncertain about their funding prospects than a year ago."
"If they don't do the proper deleveraging, they won't be able to do the credit that we are really now struggling with... That's policy challenge No.1 - we want to see the credit numbers going up."
"The ECB is aware of the challenges arising from a protracted period of low policy rates and ample liquidity."

Translation:  We can see that Rome is burning but we are going to continue to feed the fire because that helps the banks. 

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