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And this includes the ‘appropriate collateral’ for the unlimited USD loans as well.
ECB extending collateral (to almost anything) and introducing more longer dated repos with full allotment. Significant points: acceptable ratings down from A- to BBB- (except for ABS) syndicated loans included, also wider range of currency. Quid pro quo is higher haircuts but fair enough. So virtually no excuse for any bank to run out of money. Also pretty positive for corp spreads.
As you predicted. The US taxpayer, via the Fed, is basically the dumpster receiving all of this toxic crap from Europe. That’s got to be dollar bearish longer term.
Until the the ECB is driven to sell euros to pay back the USD it borrowed from the Fed.
And no doubt there will be continuous politically driven responses that could tilt the outcome in any direction.
Our leaders are in this way over their heads.
All they needed to do was declare a payroll tax holiday- none of this had to happen.