Who Will Profit From Eurozone QE

Who Will Profit From Eurozone QE? (by Will Denyer, GaveKal Capital): Finally, the European Central Bank is expected to launch its first program of full-blown quantitative easing, buying sovereign bonds outright with freshly-printed euros. The announcement could come as soon as this Thursday's policy meeting. But there are big questions still unanswered over how exactly to conduct QE in a currency union made up of supposedly independent countries and autonomous governments. Most analysis has focused on the question of who will bear the balance sheet risk? Will the ECB (i.e. the whole Eurosystem) buy and hold the bonds? Or will the ECB instruct its national central banks to buy the bonds of their respective governments, so keeping the credit risk isolated on their own balance sheets? In all likelihood, this is a false distinction. So long as the Eurocrats stand ready to bail out troubled governments or to let national central banks write off bad debts, the risk of default is ultimately borne by taxpayers or savers across the eurozone... continued: (VIEW LINK)


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