The direction of the European Central Bank.

Board member of the ECB, Jörg Asmussen, is a busy man:

As an apparent signals officer of the admirals flagship he is issuing signals in all directions with bunt, flash and spark.

The Spanish paper El País quote him for:

Now Spain has to present a complete strategy. Up to now they have acted too much on case by case basis.
The strategy must have two components:

  1. An independent auditing of the asset valuation – of all assets and of all banks – to create external confidence. The aim is to achieve clarity over the banks situation.
  2. Creation of a central “bad bank” to accumulate the bad loans. But the important thing is to create some sort of order. Before storing these bad loans there has to be some thoughts as to how they are to be financed or it will only create more uncertainty.

The Guardian has:

The part nationalisation (45% share) is not enough.


  • The problem remain that banks will not transfer these bad loans, as a central garbage can will only receive them in impaired condition. It is even this impairment that is the central problem, as any realistic value – as demanded (not asked) – will remove any illusion of equity in the bank.
  • The Danish agricultural banks have run into the problem as the garbage can for such loans LFI has only received loans from already failed banks.
    With regard to Spain there does not seem to be any choice!

To France and Greece Handelsblatt:

I expect France to the Finance Pact into action without change. Furthermore I assume that the new government will keep the promise that the budget deficit next year again will be brought below the 3% limit.

It should be clear to everyone that the Finance Pact – supplemented by a stimulus packet – will not be weakened in substance.

You can’t accuse that gentleman of mincing his words.

To the Greeks he is even blunter:

Greece should be aware of that there is no alternative to the agreed restructuring program – if they are to remain in the Euro-zone.