The ECB’s role against spread

Beyond the debate over the pros and cons of direct ECB’s actions to sustain the price of European bonds under attack, Andrew Bosomworth, managing director of the German office of Pimco, the world’s largest investor in government bonds, fears that the new program will mainly attract speculators rather than long-term lenders. “If interest rates for a particular country go up, they (the speculators) will bet on an ECB intervention,” he says. “Investors oriented toward sustainability will not return until their confidence in the euro-zone project has been renewed.” In other words, a measure designed to hinder speculators could in fact be a boon to them (Spiegel online).