Link

The thing(s) to watch this week

The thing(s) to watch this week

No, not the qualification matches for the Soccer World Cup 2014. I mean the start of the hearings over the legality of the ECB’s OMT program in the context of the German constitutional law. It will be a battle of economists – Jens Weidmann (Bundesbank) against Jörg Asmussen (ECB).

This wil be exciting enough, but it is also exciting (and potentially worrying) to see what the markets are going to do regarding the allaged quantitative limit on OMT operations. Any confirmation that the ECB’s bazooka may in fact, a smaller gun than presumed, may trigger again increases in bond spreads, which will be very painful, also for the Dutch banks in particular. Furthermore, it will once more show that this muddling through doesn’ work.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s