4. In 2016 why did the ECB/European Central Bank start purchasing corporate bonds ?

in #money6 years ago

The Chart below shows The European Banks with Billions in non performing loans:
europes banks 2016.jpg

Deutsche Bank was also having large losses during this time period. Deutsche Bank is the largest bank in Europe and is connected to all the banks through it's massive the Derivatives Market in the Trillions. The Italians banks were having insolvency issues.
The Italian Banks were going to need another Bail Out from the ECB. But there was a problem, these banks were bailed out in 2008 and the European Citizens were angry about those Bail outs. The New Bail In rules were imposed, which means the Creditors would incur the losses not the Tax Paying Citizens. So the ECB's Mario Dragi announced
On March 10 2016, the ECB decided on a illegal monetary policy measures, including the launch of the CSPP as an additional component of the asset purchase programme. In the CSPP verbiage it states excluding Non-Corporate Bank Bonds, but makes no mention of purchases of Bank Stocks or ETFs. The ECB can purchase Bank Stock and maybe purchase some corporate Bonds that have non performing loans with the Banks.

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