Great post,seems the ECB is now under the microscope along side those German politicians.
ECB has no independence,to call it so is a travesty.Yet we find it repeated over and over in the ECB policy document I looked at last night.
http://www.ecb.eu/pub/pd...monetarypolicy2011en.pdfQuote:The institutional framework of
the single monetary policy is based
on two fundamental principles that
are indispensable for sound monetary
policy-making. First, the central
bank’s mandate shall focus clearly and
unambiguously on maintaining price
stability. Second, the central bank shall
be independent.
That bit was written by Jurgen Stark who has since resigned over the ECBs bond buying exercises...so at least someone has principles here.
Then we get under a side headed "Arrangements
for sound
fiscal policies"......
Quote:Fiscal policies have a significant impact
on economic growth, macroeconomic
stability and inflation. A number of
institutional arrangements for sound
fiscal policies have been agreed at the
EU level, also with a view to limiting
risks to price stability (see Box 2.1).
These include:
• the prohibition of monetary financing
(Article 123 of the TFEU);
• the prohibition of privileged access
to financial institutions (Article 124
of the TFEU);
• the no-bail-out clause (Article 125 of
the TFEU);
• the fiscal provisions for avoiding
excessive government deficits
(Article 126 of the TFEU, which
also sets out the excessive deficit
procedure);
• the Stability and Growth Pact
(secondary legislation based on
Articles 121 and 126 of the TFEU).
These are not monetary policies,the ECB is getting its fingers involves in fiscal policy..and does not even deny it.
I read a few days ago that the BoE is having a big debate about whether it should in fact buy private bonds in addition to government bonds,meanwhile the ECB is gayly enforcing controls on government spending and deficit limits.Mervy King would dream of such power.
Edited by user 16 August 2012 15:50:04(UTC)
| Reason: Not specified
