Jen says Nein

Everyone knows that the German Bundesbank president Jens Weidmann has been a thorn in the side for ECB President Mario Draghi. The Italian would love to unleash the type of unconventional monetary policy that would have financial markets salivating, the purchase of Eurozone government bonds. Jens is not only against this, he opposed the purchase of asset-backed securities by the ECB given what he says is the “risk that we will overpay for these assets”, a valid concern since one has to question why a market starved of yield would not buy these securities. PRICE! “That would represent a transfer of risk from the banks and other investors to the central banks and ultimately to the taxpayers” said the German in an interview that was published in the Wall Street Journal last week. Entitled “Decision on risks for taxpayers lies with elected politicians” the full interview is well worth reading to get an insight into the diverging views developing that could have massive implications on the direction of the European project.