IMF to ECB - do something!

yoganmahew · June 22, 2011, 11:56am

ftalphaville.ft.com/blog/2011/06 … af-please/

IMF to Europe: could you try TAF please?
Posted by Joseph Cotterill on Jun 22 12:05.
In this context, it will be essential to bring the unproductive debate about debt re-profiling or restructuring to closure quickly.
We were so distracted by the IMF’s pragmatic controversial application of the word ‘unproductive’ in its Article IV consultation on the eurozone…

… that we completely missed this gem from the report:
Many banks still rely heavily on European Central Bank (ECB) financing, and market access might not be immediate even after a recapitalization. A conditional term funding facility for private illiquid assets, possibly operated by the ECB but with the explicit backing of euro area sovereigns (e.g., via the EFSF), would smooth the transition, while protecting the ECB’s independence and flexibility and reinforcing the incentives to tackle the banking problems at their root.
In short, the IMF wants a TAF-TARP hybrid for Europe.

In effect, the IMF is telling the ECB to get lost.