Tradutor

quinta-feira, janeiro 22, 2015

SOS EURO, ECB to the rescue

(ver em Português abaixo) 
The ECB announced today that it will buy € 60 Bln of assets each month until Sep-2016.

Unlike other central banks, which have  the key  monetary policy objective of keeping inflation within an acceptable band around 2%, the ECB is also being called on to revive the Eurozone economy and to save the single currency, the Euro.

As the ECB launches a new Quantitative Easing program, which can be seen as QE 2 European style, it will again increase its balance sheet to the level of € 3,000 Bln topped in 2012 with bank emergency funding, but which came down to close to € 2,000 Bln in 2014. That earlier QE 1 allowed banks of the most indebted countries such as Portugal to draw funds from the ECB to lend to local borrowers in order to enable them to "repay" the international creditors, including official creditors such as the EIB. This substitution of original creditors greatly benefitted the main creditors who had let too much, such as German, French, English and Spanish banks, and so had the support of those national authorities.

But if with the initial QE 1 ECB released many of the international creditors, debtors hardly received any debt relief, with the exception of the debt forgiveness granted to Greece. Since then, the increase in spreads and the fall in inflation has increased the real burden of debt in other indebted countries, which is generally recognized as an untenable situation.

We must reduce the real debt burden of the overly indebted borrowers, either through debt restructuring or through increasing their income, though inflation, exports, etc.  Instead, we live with "zombies", companies and banks that are hardly alive.

Strangely, countries like Germany which most benefited from such debt relief in the past have short memories of this, and are now the most insistent on defending their creditor rights, and on rejecting responsibility for their part in the European subprime credit bubble.

But a central bank is not a "jack of all trades" and monetary policy   cannot, alone, revive each of the 18 diverging Eurozone economies, much less in the current  "liquidity trap", when interest rates are near zero and increases in the money supply do not translate into increased economic activity or even into inflation.

What can be expected from the new Eurozone QE 2 is that the Euro, already at the minimum of 11 years, will depreciate, and the prices of financial assets such as equities and (risk free) bonds will increase.  Given the reliance on " trickling down ", reductions in the cost and increases in the volume of (risk-bearing) credit to the real economy are unlikely, as are increases in the most important "price" of all, nominal wages " in the distressed countries,

The 18 Eurozone countries are increasingly polarized and divergent, so increasing "low-risk” liquidity may help a little, but cannot guarantee boosting credit to real economies  where it is urgently needed, and upon which  debt repayment capacities depend.

The flood of liquidity in Frankfurt will reach Amarante in an eye-dropper.

This is because more (risk-free) liquidity does not guarantee more credit capacity, more bank capital or more abilty to evaluate projects and borrowers and to manage credit portfolios. Liquidity is general. Credit is specific, directed, takes risk, assumes losses and undertakes restructurings when needed. The are the true functions of intermediation which the Eurozone financial system is failing to carry out now.  

The ECB has been buying "covered bonds" from banks, backed by credit assets to the private sector and businesses. In 2014, the ECB bought € 30 Bln of bank bonds and less than € 3 Bln of asset securitizations. This was still very little, but it's still more than the d € 22 Bln of EIB Global Loans repassed by local banks to SMEs.  As the official development bank of the European Union, the EIB would be the institution specifically mandated to finance the real economy, but it hampered by a inappropriate “risk free” focus and by few “real financing” instruments such as export credit.

What is at stake is dramatic for the 18 countries of  the Eurozone and the EU overall, because  the continuing economic weaknesses   and deflation will provoke  more recession (the third in five years) and increase in the real burden of debt. 

But the new QE 2 Quantitative Easing is no panacea. What is missing is fiscal and budget stimulus in creditor and surplus countries.  Germany is even unwilling to borrow in order to invest in the badly needed renewal of their infrastructure. So the QE 2 will not solve the excessive debt problem nor the lack of income of the debtor countries, which requires an increase of exports and rebalancing intra-Eurozone trade.

Let us be clear:  The biggest threat to the Euro is the diverging fortunes and trade imbalances among the 18 Eurozone countries. 

Thus, the success of the new Eurozone QE 2 Quantitative Easing will be measured not in the falling yields of German bunds, but in the falling intra-Eurozone trade imbalances, not by the size of the ECB balance sheet, but by the availability of export credit to struggling exporters in Portugal, Spain and other indebted countries.

In the case of severe distress, in the Eurozone it has always been the debtors, or taxpayers, who  bear the costs of adjustment, rather than the creditors responsible for the credit bubble.  If Germany and other creditors could promote expansionary policies, and share the cost of adjustment of the excessive credit, this would separate the problem of credit from the problem of currency. After all, creditor countries need to undertake their own “structural reforms" as much as the debtor countries. 

Because the unsustainable debt is unsustainable, be it in Euros or in any other currency.

Saving the Euro is not enough. 

It is essential to Save Our  Societies, massacred by the very high unemployment and gripped by the lack of liquidity.

Mariana ABRANTES de Sousa 
PPP Lusofonia 
Portugal, 22-Jan-2015 

O BCE anunciou hoje que vai comprar €60 Bln de activos por mês até Set-2016. 

Ao contrário de outros bancos centrais, que tem como principal objectivo da politica monetária conter a inflação dentro de uma banda aceitável cerca dos 2%, o BCE é chamado a reanimar a economia da Eurozone e salvar a Moeda Única, o Euro.  
Com um novo programa de Quantitative Easing, QE 2 à europeia, o BCE volta  aumentar o seu balanço de tinha ultrapassado €3 000 Bln em 2012 com os financiamentos bancários de emergência, mas que desceu para perto de €2 000 Bln em 2014.  Aquele  QE 1 em tempo de crise permitiu que os bancos dos países mais endividados como Portugal  fossem buscar fundos ao BCE para emprestar às empresas para que estas pudessem "reembolsar" outros credores internacionais, inclusive o BEI.  Esta substituição de credores favoreceu bastante os principais credores, bancos alemães, franceses, ingleses e espanhóis, e por isso teve o apoio dessas autoridades. 

Mas se o QE 1 do BCE  libertou muitos dos credores internacionais, os devedores pouco beneficiaram, fora o perdão de divida concedida à Grécia.  E entretanto o aumento das spreads e a queda da inflação fez aumentar a carga real do endividamento nos outros países endividados, uma situação reconhecidamente  insustentável.

Ou reduzimos a carga real da dívida através da reestruturação ou através do aumento dos rendimentos, inflação, exportações, etc. Entretanto,  convivemos com "zombies", empresas e bancos que estão vivos,  mas pouco. 

Mas um  Banco Central não é “pau para toda a obra” e  a politica monetária a cargo da Autoridade Monetária não consegue, sozinha, reanimar a economia, muito menos nesta conjuntura de “liquidity trap”, quando as taxas de juro estão perto do zero e aumentos na massa monetária não se traduzem nem em aumento de actividade económica nem sequer em inflação.  

O que se pode esperar do novo QE 2 europeu é que o EURO continue a desvalorizar, já está nos mínimos de 11 anos, e que aumentem os preços dos activos financeiros como as acções e obrigações de baixo risco. Por muito eficaz que seja o "trickle down",  é pouco provável reduzir o custo e aumentar volume do crédito à economia real ou  aumentar o "preço" mais importante, os salários nos países sobre endividados. 

Nesta  Eurozone cada vez mais polarizada e divergente, o aumento de liquidez focada no "baixo-risco"  pode ajudar, mas não garante o aumento de crédito à economia real dos países mais endividados onde isso é uma necessidade premente, e da qual depende a nossa capacidade de reembolso da dívida.  


O enorme caudal de liquidez em Frankfurt vai chegar a conta-gotas a Amarante.  


Isto porque mais liquidez  (risk-free) não significa mais capacidade de crédito, nem mais capacidade de avaliar projectos e mutuários e de gerir carteiras de crédito.  Liquidez é avulso. Crédito é dirigido, toma risco,  assume perdas e faz reestruturações quando necessário. Tudo funções de intermediação que o sistema financeiro deixou de saber fazer.


O BCE tem estado a comprar "covered bonds", obrigações bancárias caucionadas com os activos do credito bancário ao sector privado  e empresas.  Em 2014, o BCE comprou €30 biliões de obrigações bancárias e menos  de €3 Bln de titularizações de activos.  Isto é pouquíssimo, mas mesmo assim é mais que os cerca de €22 Bln de Global Loans do BEI  repassadas pelos bancos locais às PME.  O BEI é o banco oficial de desenvolvimenta da EU que tem o mandato  específico de financiar a economia real. 

O que está em causa é dramático para a Eurozone e para a EU, pois a continuarem as quebras na actividade económica e a deflação teremos mais recessão (a terceira em 5 anos) e maior carga real da divida.

Mas o Quantitative Easing QE não é panaceia.  Falta um estímulo fiscal e orçamental nos países credores e superavitários, como a Alemanha,  que não quer endividar-se nem para investir na renovação da sua infraestrutura que tanto precisa.  Nos casos de distress, na Eurozone têm sido sempre os devedores, ou os contribuintes, a suportarem os custos do ajustamento, pouco  os credores responsáveis pela bolha de crédito. Por isso o QE 2  não vai resolver o problema de divida excessiva, nem o  da falta de receitas dos países devedores, que depende do aumento de exportações e do reequilíbrio comercial entre os 18 países da Eurozone. 

Se a Alemanha e os outros credores promovessem politicas expansionistas,  e partilhassem  como credores o custo do ajustamento do credito excessivo, poder-se-ia separar o problema do credito do problema da moeda.  Afinal também faltam "reformas estruturais" nos países credores que permitam isso.

Porque a  divida  insustentável é insustentável,  seja em Euros seja noutra moeda qualquer

Salvar o Euro não basta.  

É essencial salvar as nossas economias e sociedades, massacradas com desemprego elevadíssimo e apertos de liquidez depressivos.    

Mariana Abrantes de Sousa 
PPP Lusofonia 
Sources: 
Bloomberg  http://www.bloomberg.com/news/2015-01-21/ecb-said-to-propose-qe-of-50-billion-euros-a-month-through-2016.html
Credit writedowns https://www.creditwritedowns.com/2014/02/ecbs-next-steps-could-involve-suspending-smp-sterilization-instant-qe.html
Público http://www.publico.pt/economia/noticia/bce-avanca-para-compra-de-divida-de-60-mil-milhoes-de-euros-por-mes-1683029 
Economico http://economico.sapo.pt/noticias/compra-de-divida-soberana-pelo-bce-nao-viola-lei-europeia_209866.html


5 comentários:

  1. In the concrete case what has happened is that during the artificial boom, countries like Spain and Greece saw an explosion in imports as consumers were spending their phantom wealth. The resulting current account deficits were financed through their capital accounts, with foreign investors (banks, insurance companies, investment funds, as well as FDI) flooding these countries with the money required. As long as it was held that the convergence of euro area interest rates was the ‘new normal’, there was no problem. But then it turned out – beginning with Greece, Ireland and Portugal – that the banking crisis in the wake of 2008 had pushed the finances of the governments of these countries to the brink. Again, the markets would probably have ignored this, or rather, reacted by selling the currencies of these countries, had they still had their own currencies and been able to print money at leisure. But then it dawned on market participants that with the ECB in charge, this was no longer possible. Government insolvencies were suddenly regarded as a real prospect and all that foreign money fled in one fell swoop. The euro area payments system provided a stealth bailout via the TARGET 2 payments system, but only after the current account deficits had been eliminated – mainly due to a plunge in imports on account of the boom’s phantom wealth disappearing – did the pressure on yield spreads subside.

    ResponderEliminar
  2. It should be added here that the ECB has in fact acted far more conservatively than other major central banks, in spite of the 'OMT' announcement and various interventions it has undertaken.
    This is so because 'OMT' never went beyond the announcement stage and the other interventions were indeed designed as temporary. Hence the ECB's balance sheet has actually begun to shrink since mid 2012. Don't forget though that it remains quite elevated relative to the pre-2007/2008 period – we have merely become inured to the huge amounts of credit central banks are routinely giving birth to these days:

    ResponderEliminar
  3. O Banco Central Europeu vai injetar 60 mil milhões de euros por mês na economia, pelo menos até setembro de 2916. O BCE vai comprar dívida pública e privada. Um mega-plano para relançar a economia europeia e travar os riscos de deflação. Assim, o Banco Central Europeu poderá gastar 1 bilião 140 mil milhões de euros no total numa tentativa de travar a queda dos preços e estimular o crescimento da Zona Euro.

    Em Portugal, a injeção deste dinheiro do BCE deverá rondar os mil 450 milhões de euros por mês. Ou seja, no total do programa a verba para os portugueses poderá atingir os 27 mil e 500 milhões de euros.

    ResponderEliminar
  4. The Eurozone faces a very difficult uphill struggle to resume meaningful growth to a widely-varied set of diverging economies and societies. The aftershocks of the financial crisis proved to be - rather unsurprisingly - deeply asymmetrical leaving Germany to benefit from them early on while other countries took the pain one after the other especially in Southern Europe.

    ResponderEliminar
  5. The Eurozone is little more than a journalistic concept, a mere collection of sharply divergent economies.
    Many of the Eurozone member countries have, or had, very serious balance of payments problems, with CAB deficits as high as -10% of GDP.

    Unlike the US Federal Reserve System which has 12 FRBs in 12 Federal Reserve districts, to account for varying local economic and financial conditions, Eurozone monetary and banking policy is "made in Frankfurt".

    ResponderEliminar