Reuters: ECB faces pressure to unlock bonds and avert market squeeze

The European Central Bank is coming under pressure from bankers to lend more of its stash of German government bonds to avert a market squeeze that would undo some of its own stimulus efforts.

Having drained the markets with its multi-trillion-euro debt-buying programmes, the ECB has left fewer bonds sitting on dealers’ balance sheet and available to be borrowed on the repo market.

Investors are currently paying 0.99% to borrow German bonds against cash for two months, implying a 7% rate for bonds lent on Dec. 31 for the following Monday, data on Refinitiv Eikon shows. Borrowing the debt for two months cost 0.6% two months ago.

The full article is available at https://www.reuters.com/markets/europe/ecb-faces-pressure-unlock-bonds-avert-market-squeeze-2021-11-25/

Related Posts

Previous Post
FCA and BoE consult on UK EMIR reporting requirements
Next Post
IMF: How Does the Repo Market Behave Under Stress? Evidence From the COVID-19 Crisis

Fill out this field
Fill out this field
Please enter a valid email address.

X

Reset password

Create an account