ECB Stealth QE Euro 489 Billion Money Printing to Prevent Eurozone Banking System Collapse

The ECB's stealth QE objective was first to prevent the insolvent euro-zone banks from collapsing over the next few weeks as they were unable to refinance their short-term maturing debts as well as a run on the banks in progress in the euro-zone, and secondly (directly related) to encourage the banks to buy sovereign debt of bankrupting euro-zone countries because the ECB is not allowed to buy sovereign debts. Today's actions of giving cheap money to the banks (1% per year interest rate) achieves both objectives as the banks took the money to use it to cover short-term maturing debt as well as buy a load of PIIGS debt, and thus are buying time (a couple of months at best) and so greatly diminishes the risks for what was looking like a near imminent collapse of the euro-zone (regardless of whether the trigger was a bankrupt Sovereign or large bank as both )....more