denials from those 5 countries, and from the @EU_Commission that it's working on #Coronabonds
But with political momentum - and it may still come - Commission already has in its drawers a prototype of how to do it
those of us who followed the very niche, until #coronavirus, question of single safe asset remember @EU_Commission Commission plans for securitising sovereign bonds, approved by the @Europarl_EN.
ec.europa.eu/info/business-…
SBBSies are technocratic solution to political problem of Euroarea macrofinancial architecture: Germany has exorbitant privilege from issuing Euroarea safe asset , deriving benefits (flight to safety) without responsbilities (Bund shortage)
SBBSies are a technocratic solution hated by:
1. Private finance: risk/return numbers dont add up
2. Sovereign debt managers (DMOs) all over Euroarea: what about our liquidity?
3. Some in the ECB: seriously, securitisation?
Commission Impact Assessment dismissed liquidity concerns: SBBSies = QE
but packaging Euro sovereigns in a special purpose vehicle to issue 3 tranches of SBBSies is not the same as QE.
ECB designed QE purchases of sovereign bonds (PEPP) to minimise negative liquidity effects - as I argued in hearing at @Europarl_EN.
SBBSies are not designed to do that.
but good news is that @EU_Commission has thought about these issues, and can reorient SBBSies plans to public Coronabonds.
Like Dyson making ventilators, Commission can give us Coronabonds, especially w ECB on board.
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