Monday, July 18, 2011

Is the ECB betraying its objective of price stability by purchasing Greek bonds?

How exactly does the ECB justify this intervention when it is quite possibly inflationary? I know they are sterilizing their purchases by taking 1-week deposits, but isn't this a risky move? Shouldn't they be more concerned with monetary policy than fiscal policy, as is statutorily required of them? Or are they not as immune from political motives as they claim to be?

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