ECB May Have To Take Over From The Fed: Societe Generale

The European Central Bank (ECB) may have to take over the Federal Reserve’s role in providing liquidity if it is going to protect the Eurozone’s budding recovery, say Societe Generale analysts Patrick Legland and Daniel Fermon. The introduction of forward guidance may be just the first step necessary to keep bond rates low, maintain liquidity, and prevent the euro from appreciating too quickly. ECB pushing interest rates down “Financial conditions have tightened in the eurozone since Mr Bernanke first commented, on 22 May, on the possibility of tapering the Fed’s asset purchases,” they write. And even though the tapering delay…