The ECB's press conference, which lately has been seeing rather aggressive questions from the press corps (especially if the Finns are present like last time) and very rambling non-answers from Trichet
can be followed live below. Expect to see some volatility in the EUR as a
result of Trichet's carefully chosen words. Once again, the keyword of
note is "vigilance."
And the meandering responses begin:
How does raising rates not impact PIIGS and is the ECB comfortable with the quality of the collateral?
1. We are anchoring stability and anchoring confidence. We believe what is good for the core is good for everyone. We are contributing to the prosperity of everyone. The demand for price stability comes from all citizens.
2. We have a framework, and have strong determination to apply rules whatever happens "here and there" and have clear position with respect [worst answer ever]
Is this a start of interest rate increases? Was decision unanimous and if not what were the arguments? Will ongoing fiscal tensions impact non-standard interest rate measures policy?
1. Yes on unanimous.
2. On indication, would say it means that we are in mode where there might be an increase of rates but are never precommited. If we would raise rates would say so. We are not signalling any particular pace for future movement of interest rates.
3. Nonstandard measures will be commensurate with proper functioning of some markets.Whatever happens we must delivery price stability.
Will there be a commitment from the private sector on Greece without triggering a default event. If rating agencies then declare this to be a credit event, will it impact ECB to accept Greek bonds as collateral?
1. Not in favor of restructuring. Exclude all elements that would not be purely voluntary. Call for avoiding any credit event and selective default. We have no dialog with one particular government [ahem Germany] have dialog with 17 countries, the Eurogroup We are fiercely independent. No clear answer on whether Greek bonds will be eligible following EOD: will demand collateral rules [on what? bankrupt bonds? - is that a 10 point haircut?]
2. On private sector involvement: surprised by the narrow view on the private sector in the present debate: should not foget that private capital is also utilized when embark on privatization. We urge Greece to mobile private capital and accelerate its privatizations.
Schauble would like to prolong Greek bonds on a voluntary basis. Do you agree with this?
We exclude all concepts that would not be purely voluntary.
You have not excluded a voluntary rollover. Will ECB rollover its own holdings of Greek bonds? If Rating Agencies said voluntary rollover was EOD, would Rating Agencies be given the final world.
[And back to the same old] - council would exclude any EOD. Not the ECB's intention to roll over its Greek bonds. [this is actually important as it indicates just how "voluntary" a voluntary rollover would work. I.e., not at all]
Public perception is that ECB is at loggerheads with German finmin. Is that detrimental to perception of Eurozone as a whole. Also will ECB raise haircut on Greek bonds to incentivize roll over decision.
We are the Central Bank of 17 countries and 331 million people, and can not engage in particular dialogue with 17 governments. The governing council of the eurosystem takes place with the "college" [WTF] of the government. We have an organized dialogue with the college called the Eurogroup.