Pulling the OMT Trigger
The ECB’s decision in September to proceed with its “outright monetary transactions” program to purchase distressed eurozone members’ government bonds has restored financial calm to Europe. But vulnerable countries like Italy and Spain would be well advised to request OMT intervention before it is desperately needed.
https://prosyn.org/B3YLYy2
CHICAGO – Europe has been experiencing a period of calm after the storm since European Central Bank President Mario Draghi’s “whatever it takes” speech in July and the ECB’s decision in September to proceed with its “outright monetary transactions” (OMT) program to purchase distressed eurozone members’ government bonds. The interest-rate spreads for Italian and Spanish government bonds have dropped dramatically, corporate-bond issues have resumed, and a sense of normalcy is slowly pervading the continent.