The European Central Bank (ECB) will introduce quantitative easing (QE) this week, but in a manner that shares risks among all eurozone nations, following concerns from Germany, the Financial Times reported yesterday.
The ECB is to hold its first policy meeting of the year on Thursday and is widely expected to announce some sort of program of sovereign bond purchases — or QE — to try to kick-start the eurozone’s sluggish economy.
German government officials, as well as central bank Deutsche Bundesbank President Jens Weidmann, have repeatedly voiced concern about such a program.
They believe it will take away the pressure on governments to push through essential, but painful, economic reforms, and taxpayers, particularly German ones, could end up footing the bill should another country be unable to repay its debt, the critics argue.
The Financial Times reported that, in a compromise move, “the most likely option at this stage [is] for the ECB to force the 19 national central banks that make up the eurozone stand behind their own sovereign bonds.”
German news magazine Der Spiegel reported on Friday that national central banks would only be allowed to buy the sovereign debt of their respective countries, to ensure they alone carried the risk of a possible default.
The weekly said that ECB president Mario Draghi had presented the scheme to German Chancellor Angela Merkel and Finance Minister Wolfgang Schaeuble in a meeting on Wednesday.
Merkel’s office confirmed a meeting took place, but refused to reveal what was discussed.
The weekly, in a pre-released copy of a story to appear in today’s edition, said that under the revised scheme, the national central banks will only be allowed to buy the sovereign debt of their respective countries.
That means that each national central bank alone will carry the risk of a possible default by their government, and that Germany, Europe’s paymaster, will not have to bail out another country, the magazine said.
In addition, a ceiling of between 20 percent and 25 percent will be set on how much a central bank can buy of a government’s debt, Der Spiegel said, without revealing its sources.
Greece will not participate in the scheme, because its sovereign debt does not fulfil the necessary quality criteria, the report said.
This week’s undoing of the TerraUSD algorithmic stablecoin and its sister token, Luna, has ramifications for all of crypto. First, there is the immediate impact: The rapid collapse of a once-popular pair of cryptocurrencies sent a ripple effect across the industry, contributing to plummeting coin prices that wiped hundreds of billions of market value from the digital-asset market and stoked worries over the potential fragility of digital-asset ventures. Then there are the knock-on effects. In addition to delivering punishing losses to individual users and investment firms, the spectacular failure of a market darling like Terra threatens to have a cooling effect
material SHORTAGE: Even as workers are about to return, Quanta lacks operating supplies, while Pegatron reported its lowest revenues in 11 quarters, the companies said Taiwan’s major Apple Inc supplier cut its outlook for the second quarter, joining a growing list of manufacturers warning about the fallout from lockdowns aimed at containing China’s worst COVID-19 outbreak in two years. Quanta Computer Inc (廣達電腦), which assembles MacBooks, expects a 20 percent quarterly fall in notebook shipments and a squeeze on margins this quarter due to the lockdown, a company representative said on Friday during an earnings call. The impact from supply chain disruptions could last until the end of the year, she said. The company’s Shanghai factory has been operating under tight restrictions since the middle of last month,
The US and the EU were yesterday to announce a joint effort aimed at identifying semiconductor supply disruptions as well as countering Russian disinformation, officials said. Top US officials are visiting the French scientific hub of Saclay for a meetup of the Trade and Technology Council, created last year as China increasingly exerts its technology clout. US officials acknowledged that Russia’s invasion of Ukraine has broadened the council’s scope, but said the Western bloc still has its eye on competition from China. The two sides will announce an “early warning system” for semiconductors supply disruptions, hoping to avoid excessive competition between Western powers
Hon Hai Precision Industry Co (鴻海精密) has made further progress in its expansion into semiconductor manufacturing as its subsidiary teams up with Dagang NeXchange Bhd (DNeX) to build a 12-inch wafer fab in Malaysia. Big Innovation Holdings Ltd (BIH), a wholly owned subsidiary of Hon Hai, has inked a memorandum of understanding (MOU) with DNeX to collaborate on establishing and operating the semiconductor fab in the Southeastern Asian country, it said in a statement released by DNeX on its Web site. The fab is expected to produce 40,000 12-inch wafers per month, deploying 28-nanometer and 40-nanometer process technologies, the statement said. Under
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