Question: Which country was the first to be at risk for soverign default?

Answer: Greece

From late 2009 a handful of mainly southern eurozone member states started being unable to repay their national Euro-denominated government debt or to finance the bail-out of troubled financial sectors under their national supervision without the assistance of third parties. <hl> This so-called European debt crisis began after Greece 's <hl> new elected government stopped masking its true indebtedness and budget deficit and openly communicated the imminent danger of a Greek sovereign default. Seeing a sovereign default in the eurozone as a shock, the general public, international and European institutions, and the financial community started to intensively reassess the economic situation and creditworthiness of eurozone states. Those eurozone states being assessed as not financially sustainable enough on their current path, faced waves of credit rating downgrades and rising borrowing costs including increasing interest rate spreads. As a consequence, the ability of these states to borrow new money to further finance their budget deficits or to refinance existing unsustainable debt levels was strongly reduced.

From late 2009 a handful of mainly southern eurozone member states started being unable to repay their national Euro-denominated government debt or to finance the bail-out of troubled financial sectors under their national supervision without the assistance of third parties. This so-called European debt crisis began after <hl> Greece <hl>'s new elected government stopped masking its true indebtedness and budget deficit and openly communicated the imminent danger of a Greek sovereign default. Seeing a sovereign default in the eurozone as a shock, the general public, international and European institutions, and the financial community started to intensively reassess the economic situation and creditworthiness of eurozone states. Those eurozone states being assessed as not financially sustainable enough on their current path, faced waves of credit rating downgrades and rising borrowing costs including increasing interest rate spreads. As a consequence, the ability of these states to borrow new money to further finance their budget deficits or to refinance existing unsustainable debt levels was strongly reduced.

This so-called European debt crisis began after <hl> Greece <hl> 's


Question: Who brought Greece's financial crisis to the forefront?

From late 2009 a handful of mainly southern eurozone member states started being unable to repay their national Euro-denominated government debt or to finance the bail-out of troubled financial sectors under their national supervision without the assistance of third parties. This so-called European debt crisis began after Greece's new elected government stopped masking its true indebtedness and budget deficit and openly communicated the imminent danger of a Greek sovereign default. Seeing a sovereign default in the eurozone as a shock, the general public, international and European institutions, and the financial community started to intensively reassess the economic situation and creditworthiness of eurozone states. Those eurozone states being assessed as not financially sustainable enough on their current path, faced waves of credit rating downgrades and rising borrowing costs including increasing interest rate spreads. As a consequence, the ability of these states to borrow new money to further finance their budget deficits or to refinance existing unsustainable debt levels was strongly reduced.

Answer: new elected government

From late 2009 a handful of mainly southern eurozone member states started being unable to repay their national Euro-denominated government debt or to finance the bail-out of troubled financial sectors under their national supervision without the assistance of third parties. <hl> This so-called European debt crisis began after Greece's new elected government stopped masking its true indebtedness and budget deficit and openly communicated the imminent danger of a Greek sovereign default. <hl> Seeing a sovereign default in the eurozone as a shock, the general public, international and European institutions, and the financial community started to intensively reassess the economic situation and creditworthiness of eurozone states. Those eurozone states being assessed as not financially sustainable enough on their current path, faced waves of credit rating downgrades and rising borrowing costs including increasing interest rate spreads. As a consequence, the ability of these states to borrow new money to further finance their budget deficits or to refinance existing unsustainable debt levels was strongly reduced.

From late 2009 a handful of mainly southern eurozone member states started being unable to repay their national Euro-denominated government debt or to finance the bail-out of troubled financial sectors under their national supervision without the assistance of third parties. This so-called European debt crisis began after Greece's <hl> new elected government <hl> stopped masking its true indebtedness and budget deficit and openly communicated the imminent danger of a Greek sovereign default. Seeing a sovereign default in the eurozone as a shock, the general public, international and European institutions, and the financial community started to intensively reassess the economic situation and creditworthiness of eurozone states. Those eurozone states being assessed as not financially sustainable enough on their current path, faced waves of credit rating downgrades and rising borrowing costs including increasing interest rate spreads. As a consequence, the ability of these states to borrow new money to further finance their budget deficits or to refinance existing unsustainable debt levels was strongly reduced.


Question: What had Greece's previous government been hiding?

Answer: its true indebtedness and budget deficit

From late 2009 a handful of mainly southern eurozone member states started being unable to repay their national Euro-denominated government debt or to finance the bail-out of troubled financial sectors under their national supervision without the assistance of third parties. <hl> This so-called European debt crisis began after Greece's new elected government stopped masking its true indebtedness and budget deficit and openly communicated the imminent danger of a Greek sovereign default. <hl> Seeing a sovereign default in the eurozone as a shock, the general public, international and European institutions, and the financial community started to intensively reassess the economic situation and creditworthiness of eurozone states. Those eurozone states being assessed as not financially sustainable enough on their current path, faced waves of credit rating downgrades and rising borrowing costs including increasing interest rate spreads. As a consequence, the ability of these states to borrow new money to further finance their budget deficits or to refinance existing unsustainable debt levels was strongly reduced.

From late 2009 a handful of mainly southern eurozone member states started being unable to repay their national Euro-denominated government debt or to finance the bail-out of troubled financial sectors under their national supervision without the assistance of third parties. This so-called European debt crisis began after Greece's new elected government stopped masking <hl> its true indebtedness and budget deficit <hl> and openly communicated the imminent danger of a Greek sovereign default. Seeing a sovereign default in the eurozone as a shock, the general public, international and European institutions, and the financial community started to intensively reassess the economic situation and creditworthiness of eurozone states. Those eurozone states being assessed as not financially sustainable enough on their current path, faced waves of credit rating downgrades and rising borrowing costs including increasing interest rate spreads. As a consequence, the ability of these states to borrow new money to further finance their budget deficits or to refinance existing unsustainable debt levels was strongly reduced.


Question: Which countries didn't want to go around the bail-out clause and have to shoulder the burden of backing the defaulters debts.

There is also a widespread view[vague][who?] that giving much more financial support to continuously cover the debt crisis or allow even higher budget deficits or debt levels would discourage the crisis states to implement necessary reforms to regain their competitiveness.[citation needed] There has also been a reluctance[citation needed] of financially stable eurozone states like Germany[citation needed] to further circumvent the no-bailout clause in the EU contracts and to generally take on the burden of financing or guaranteeing the debts of financially unstable or defaulting eurozone countries.[citation needed]

Answer: financially stable eurozone states like Germany

There is also a widespread view[vague][who?] <hl> that giving much more financial support to continuously cover the debt crisis or allow even higher budget deficits or debt levels would discourage the crisis states to implement necessary reforms to regain their competitiveness.[citation needed] There has also been a reluctance[citation needed] of financially stable eurozone states like Germany [citation needed] to further circumvent the no-bailout clause in the EU contracts and to generally take on the burden of financing or guaranteeing the debts of financially unstable or defaulting eurozone countries.[citation needed] <hl>

There is also a widespread view[vague][who?] that giving much more financial support to continuously cover the debt crisis or allow even higher budget deficits or debt levels would discourage the crisis states to implement necessary reforms to regain their competitiveness.[citation needed] There has also been a reluctance[citation needed] of <hl> financially stable eurozone states like Germany <hl>[citation needed] to further circumvent the no-bailout clause in the EU contracts and to generally take on the burden of financing or guaranteeing the debts of financially unstable or defaulting eurozone countries.[citation needed]

that giving much more financial support to continuously cover the debt crisis or allow even higher budget deficits or debt levels would discourage the crisis states to implement necessary reforms to regain their competitiveness.[citation needed] There has also been a reluctance[citation needed] of <hl> financially stable eurozone states like Germany <hl> [citation needed] to further circumvent the no-bailout clause in the EU contracts and to generally take on the burden of financing or guaranteeing the debts of financially unstable or defaulting eurozone countries.[citation needed]


Question: What do most see raising the debt celing as doing?

Answer: discourage the crisis states to implement necessary reforms to regain their competitiveness

There is also a widespread view[vague][who?] <hl> that giving much more financial support to continuously cover the debt crisis or allow even higher budget deficits or debt levels would discourage the crisis states to implement necessary reforms to regain their competitiveness .[citation needed] There has also been a reluctance[citation needed] of financially stable eurozone states like Germany[citation needed] to further circumvent the no-bailout clause in the EU contracts and to generally take on the burden of financing or guaranteeing the debts of financially unstable or defaulting eurozone countries.[citation needed] <hl>

There is also a widespread view[vague][who?] that giving much more financial support to continuously cover the debt crisis or allow even higher budget deficits or debt levels would <hl> discourage the crisis states to implement necessary reforms to regain their competitiveness <hl>.[citation needed] There has also been a reluctance[citation needed] of financially stable eurozone states like Germany[citation needed] to further circumvent the no-bailout clause in the EU contracts and to generally take on the burden of financing or guaranteeing the debts of financially unstable or defaulting eurozone countries.[citation needed]

that giving much more financial support to continuously cover the debt crisis or allow even higher budget deficits or debt levels would <hl> discourage the crisis states to implement necessary reforms to regain their competitiveness <hl> .[citation needed] There has also been a reluctance[citation needed] of financially stable eurozone states like Germany[citation needed] to further circumvent the no-bailout clause in the EU contracts and to generally take on the burden of financing or guaranteeing the debts of financially unstable or defaulting eurozone countries.[citation needed]


Question: What could keep the crisis states from trying to stand on their own?

Answer: giving much more financial support to continuously cover the debt crisis or allow even higher budget deficits or debt levels

<hl> There is also a widespread view[vague][who?] that giving much more financial support to continuously cover the debt crisis or allow even higher budget deficits or debt levels would discourage the crisis states to implement necessary reforms to regain their competitiveness.[citation needed] There has also been a reluctance[citation needed] of financially stable eurozone states like Germany[citation needed] to further circumvent the no-bailout clause in the EU contracts and to generally take on the burden of financing or guaranteeing the debts of financially unstable or defaulting eurozone countries.[citation needed] <hl>

There is also a widespread view[vague][who?] that <hl> giving much more financial support to continuously cover the debt crisis or allow even higher budget deficits or debt levels <hl> would discourage the crisis states to implement necessary reforms to regain their competitiveness.[citation needed] There has also been a reluctance[citation needed] of financially stable eurozone states like Germany[citation needed] to further circumvent the no-bailout clause in the EU contracts and to generally take on the burden of financing or guaranteeing the debts of financially unstable or defaulting eurozone countries.[citation needed]


Question: What term was coined when Greece left the eurozone?

This has led to public discussions if Greece, Portugal, and even Italy would be better off leaving the eurozone to regain economical and financial stability if they would not implement reforms to strengthen their competitiveness as part of the eurozone in time. Greece had the greatest need for reforms but also most problems to implement those, so the Greek exit, also called "Grexit", has been widely discussed. Germany, as a large and financially stable state being in the focus to be asked to guarantee or repay other states debt, has never pushed those exits. Their position is to keep Greece within the eurozone, but not at any cost. If the worst comes to the worst, priority should be given to the euro's stability.

Answer: Grexit

This has led to public discussions if Greece, Portugal, and even Italy would be better off leaving the eurozone to regain economical and financial stability if they would not implement reforms to strengthen their competitiveness as part of the eurozone in time. <hl> Greece had the greatest need for reforms but also most problems to implement those, so the Greek exit, also called " Grexit ", has been widely discussed. <hl> Germany, as a large and financially stable state being in the focus to be asked to guarantee or repay other states debt, has never pushed those exits. Their position is to keep Greece within the eurozone, but not at any cost. If the worst comes to the worst, priority should be given to the euro's stability.

This has led to public discussions if Greece, Portugal, and even Italy would be better off leaving the eurozone to regain economical and financial stability if they would not implement reforms to strengthen their competitiveness as part of the eurozone in time. Greece had the greatest need for reforms but also most problems to implement those, so the Greek exit, also called "<hl> Grexit <hl>", has been widely discussed. Germany, as a large and financially stable state being in the focus to be asked to guarantee or repay other states debt, has never pushed those exits. Their position is to keep Greece within the eurozone, but not at any cost. If the worst comes to the worst, priority should be given to the euro's stability.

Greece had the greatest need for reforms but also most problems to implement those, so the Greek exit, also called " <hl> Grexit <hl> ", has been widely discussed.


Question: What is Germany's position on wether or not Greece should be in the eurozone?

Answer: If the worst comes to the worst, priority should be given to the euro's stability.

This has led to public discussions if Greece, Portugal, and even Italy would be better off leaving the eurozone to regain economical and financial stability if they would not implement reforms to strengthen their competitiveness as part of the eurozone in time. Greece had the greatest need for reforms but also most problems to implement those, so the Greek exit, also called "Grexit", has been widely discussed. Germany, as a large and financially stable state being in the focus to be asked to guarantee or repay other states debt, has never pushed those exits. Their position is to keep Greece within the eurozone, but not at any cost. <hl> If the worst comes to the worst, priority should be given to the euro's stability. <hl>


Question: As one of the financial powers, has Germany ever tried to force the crisis states into leaving the eurozone?

Answer: never pushed those exits

This has led to public discussions if Greece, Portugal, and even Italy would be better off leaving the eurozone to regain economical and financial stability if they would not implement reforms to strengthen their competitiveness as part of the eurozone in time. Greece had the greatest need for reforms but also most problems to implement those, so the Greek exit, also called "Grexit", has been widely discussed. <hl> Germany, as a large and financially stable state being in the focus to be asked to guarantee or repay other states debt, has never pushed those exits . <hl> Their position is to keep Greece within the eurozone, but not at any cost. If the worst comes to the worst, priority should be given to the euro's stability.

This has led to public discussions if Greece, Portugal, and even Italy would be better off leaving the eurozone to regain economical and financial stability if they would not implement reforms to strengthen their competitiveness as part of the eurozone in time. Greece had the greatest need for reforms but also most problems to implement those, so the Greek exit, also called "Grexit", has been widely discussed. Germany, as a large and financially stable state being in the focus to be asked to guarantee or repay other states debt, has <hl> never pushed those exits <hl>. Their position is to keep Greece within the eurozone, but not at any cost. If the worst comes to the worst, priority should be given to the euro's stability.

Germany, as a large and financially stable state being in the focus to be asked to guarantee or repay other states debt, has <hl> never pushed those exits <hl> .


Question: Which eurozone country has the biggest need for financial reform?

Answer: Greece

<hl> This has led to public discussions if Greece , Portugal, and even Italy would be better off leaving the eurozone to regain economical and financial stability if they would not implement reforms to strengthen their competitiveness as part of the eurozone in time. <hl> Greece had the greatest need for reforms but also most problems to implement those, so the Greek exit, also called "Grexit", has been widely discussed. Germany, as a large and financially stable state being in the focus to be asked to guarantee or repay other states debt, has never pushed those exits. Their position is to keep Greece within the eurozone, but not at any cost. If the worst comes to the worst, priority should be given to the euro's stability.

This has led to public discussions if <hl> Greece <hl>, Portugal, and even Italy would be better off leaving the eurozone to regain economical and financial stability if they would not implement reforms to strengthen their competitiveness as part of the eurozone in time. Greece had the greatest need for reforms but also most problems to implement those, so the Greek exit, also called "Grexit", has been widely discussed. Germany, as a large and financially stable state being in the focus to be asked to guarantee or repay other states debt, has never pushed those exits. Their position is to keep Greece within the eurozone, but not at any cost. If the worst comes to the worst, priority should be given to the euro's stability.

This has led to public discussions if <hl> Greece <hl> , Portugal, and even Italy would be better off leaving the eurozone to regain economical and financial stability if they would not implement reforms to strengthen their competitiveness as part of the eurozone in time.


Question: What would cause the private banking system to weaken?

However, if the debt rescheduling causes losses on loans held by European banks, it weakens the private banking system, which then puts pressure on the central bank to come to the aid of those banks. Private-sector bond holders are an integral part of the public and private banking system. Another possible response is for wealthy member countries to guarantee or purchase the debt of countries that have defaulted or are likely to default. This alternative requires that the tax revenues and credit of the wealthy member countries be used to refinance the previous borrowing of the weaker member countries, and is politically controversial.

Answer: if the debt rescheduling causes losses on loans held by European banks

<hl> However, if the debt rescheduling causes losses on loans held by European banks , it weakens the private banking system, which then puts pressure on the central bank to come to the aid of those banks. <hl> Private-sector bond holders are an integral part of the public and private banking system. Another possible response is for wealthy member countries to guarantee or purchase the debt of countries that have defaulted or are likely to default. This alternative requires that the tax revenues and credit of the wealthy member countries be used to refinance the previous borrowing of the weaker member countries, and is politically controversial.

However, <hl> if the debt rescheduling causes losses on loans held by European banks <hl>, it weakens the private banking system, which then puts pressure on the central bank to come to the aid of those banks. Private-sector bond holders are an integral part of the public and private banking system. Another possible response is for wealthy member countries to guarantee or purchase the debt of countries that have defaulted or are likely to default. This alternative requires that the tax revenues and credit of the wealthy member countries be used to refinance the previous borrowing of the weaker member countries, and is politically controversial.

However, <hl> if the debt rescheduling causes losses on loans held by European banks <hl> , it weakens the private banking system, which then puts pressure on the central bank to come to the aid of those banks.


Question: Who purchases the debt of countries that cannot repay and are in danger of default?

Answer: wealthy member countries

However, if the debt rescheduling causes losses on loans held by European banks, it weakens the private banking system, which then puts pressure on the central bank to come to the aid of those banks. Private-sector bond holders are an integral part of the public and private banking system. <hl> Another possible response is for wealthy member countries to guarantee or purchase the debt of countries that have defaulted or are likely to default. <hl> This alternative requires that the tax revenues and credit of the wealthy member countries be used to refinance the previous borrowing of the weaker member countries, and is politically controversial.

However, if the debt rescheduling causes losses on loans held by European banks, it weakens the private banking system, which then puts pressure on the central bank to come to the aid of those banks. Private-sector bond holders are an integral part of the public and private banking system. Another possible response is for <hl> wealthy member countries <hl> to guarantee or purchase the debt of countries that have defaulted or are likely to default. This alternative requires that the tax revenues and credit of the wealthy member countries be used to refinance the previous borrowing of the weaker member countries, and is politically controversial.


Question: What happens when the private banking system is weakened?

Answer: pressure on the central bank to come to the aid of those banks

<hl> However, if the debt rescheduling causes losses on loans held by European banks, it weakens the private banking system, which then puts pressure on the central bank to come to the aid of those banks . <hl> Private-sector bond holders are an integral part of the public and private banking system. Another possible response is for wealthy member countries to guarantee or purchase the debt of countries that have defaulted or are likely to default. This alternative requires that the tax revenues and credit of the wealthy member countries be used to refinance the previous borrowing of the weaker member countries, and is politically controversial.

However, if the debt rescheduling causes losses on loans held by European banks, it weakens the private banking system, which then puts <hl> pressure on the central bank to come to the aid of those banks <hl>. Private-sector bond holders are an integral part of the public and private banking system. Another possible response is for wealthy member countries to guarantee or purchase the debt of countries that have defaulted or are likely to default. This alternative requires that the tax revenues and credit of the wealthy member countries be used to refinance the previous borrowing of the weaker member countries, and is politically controversial.

However, if the debt rescheduling causes losses on loans held by European banks, it weakens the private banking system, which then puts <hl> pressure on the central bank to come to the aid of those banks <hl> .


Question: What is to be used to guarantee the debtors repayment, by the banks assuming their debt?

Answer: tax revenues and credit of the wealthy member countries

However, if the debt rescheduling causes losses on loans held by European banks, it weakens the private banking system, which then puts pressure on the central bank to come to the aid of those banks. Private-sector bond holders are an integral part of the public and private banking system. Another possible response is for wealthy member countries to guarantee or purchase the debt of countries that have defaulted or are likely to default. <hl> This alternative requires that the tax revenues and credit of the wealthy member countries be used to refinance the previous borrowing of the weaker member countries, and is politically controversial. <hl>

However, if the debt rescheduling causes losses on loans held by European banks, it weakens the private banking system, which then puts pressure on the central bank to come to the aid of those banks. Private-sector bond holders are an integral part of the public and private banking system. Another possible response is for wealthy member countries to guarantee or purchase the debt of countries that have defaulted or are likely to default. This alternative requires that the <hl> tax revenues and credit of the wealthy member countries <hl> be used to refinance the previous borrowing of the weaker member countries, and is politically controversial.


Question: Is using the tax revenues and credit of the more stable banks to bail out the ones in danger of default an accepted practice?

Answer: is politically controversial

However, if the debt rescheduling causes losses on loans held by European banks, it weakens the private banking system, which then puts pressure on the central bank to come to the aid of those banks. Private-sector bond holders are an integral part of the public and private banking system. Another possible response is for wealthy member countries to guarantee or purchase the debt of countries that have defaulted or are likely to default. <hl> This alternative requires that the tax revenues and credit of the wealthy member countries be used to refinance the previous borrowing of the weaker member countries, and is politically controversial . <hl>

However, if the debt rescheduling causes losses on loans held by European banks, it weakens the private banking system, which then puts pressure on the central bank to come to the aid of those banks. Private-sector bond holders are an integral part of the public and private banking system. Another possible response is for wealthy member countries to guarantee or purchase the debt of countries that have defaulted or are likely to default. This alternative requires that the tax revenues and credit of the wealthy member countries be used to refinance the previous borrowing of the weaker member countries, and <hl> is politically controversial <hl>.

This alternative requires that the tax revenues and credit of the wealthy member countries be used to refinance the previous borrowing of the weaker member countries, and <hl> is politically controversial <hl> .


Question: Who retains ownership of the collateral until the debt is paid?

In contrast to the Fed, the ECB normally does not buy bonds outright. The normal procedure used by the ECB for manipulating the money supply has been via the so-called refinancing facilities. In these facilities, bonds are not purchased but used in reverse transactions: repurchase agreements, or collateralised loans. These two transactions are similar, i.e. bonds are used as collaterals for loans, the difference being of legal nature. In the repos the ownership of the collateral changes to the ECB until the loan is repaid.

Answer: ECB

<hl> In contrast to the Fed, the ECB normally does not buy bonds outright. <hl> The normal procedure used by the ECB for manipulating the money supply has been via the so-called refinancing facilities. In these facilities, bonds are not purchased but used in reverse transactions: repurchase agreements, or collateralised loans. These two transactions are similar, i.e. bonds are used as collaterals for loans, the difference being of legal nature. In the repos the ownership of the collateral changes to the ECB until the loan is repaid.

In contrast to the Fed, the <hl> ECB <hl> normally does not buy bonds outright. The normal procedure used by the ECB for manipulating the money supply has been via the so-called refinancing facilities. In these facilities, bonds are not purchased but used in reverse transactions: repurchase agreements, or collateralised loans. These two transactions are similar, i.e. bonds are used as collaterals for loans, the difference being of legal nature. In the repos the ownership of the collateral changes to the ECB until the loan is repaid.


Question: Since the ECB doesn't buy bonds outright, how are they used?

Answer: refinancing facilities

In contrast to the Fed, the ECB normally does not buy bonds outright. <hl> The normal procedure used by the ECB for manipulating the money supply has been via the so-called refinancing facilities . <hl> In these facilities, bonds are not purchased but used in reverse transactions: repurchase agreements, or collateralised loans. These two transactions are similar, i.e. bonds are used as collaterals for loans, the difference being of legal nature. In the repos the ownership of the collateral changes to the ECB until the loan is repaid.

In contrast to the Fed, the ECB normally does not buy bonds outright. The normal procedure used by the ECB for manipulating the money supply has been via the so-called <hl> refinancing facilities <hl>. In these facilities, bonds are not purchased but used in reverse transactions: repurchase agreements, or collateralised loans. These two transactions are similar, i.e. bonds are used as collaterals for loans, the difference being of legal nature. In the repos the ownership of the collateral changes to the ECB until the loan is repaid.

The normal procedure used by the ECB for manipulating the money supply has been via the so-called <hl> refinancing facilities <hl> .


Question: What is the manner in which bonds are used at refinancing facilities?

Answer: repurchase agreements, or collateralised loans

In contrast to the Fed, the ECB normally does not buy bonds outright. The normal procedure used by the ECB for manipulating the money supply has been via the so-called refinancing facilities. <hl> In these facilities, bonds are not purchased but used in reverse transactions: repurchase agreements, or collateralised loans . <hl> These two transactions are similar, i.e. bonds are used as collaterals for loans, the difference being of legal nature. In the repos the ownership of the collateral changes to the ECB until the loan is repaid.

In contrast to the Fed, the ECB normally does not buy bonds outright. The normal procedure used by the ECB for manipulating the money supply has been via the so-called refinancing facilities. In these facilities, bonds are not purchased but used in reverse transactions: <hl> repurchase agreements, or collateralised loans <hl>. These two transactions are similar, i.e. bonds are used as collaterals for loans, the difference being of legal nature. In the repos the ownership of the collateral changes to the ECB until the loan is repaid.

In these facilities, bonds are not purchased but used in reverse transactions: <hl> repurchase agreements, or collateralised loans <hl> .


Question: Who buys the bonds instead of using them in reverse transactions?

Answer: the Fed

<hl> In contrast to the Fed , the ECB normally does not buy bonds outright. <hl> The normal procedure used by the ECB for manipulating the money supply has been via the so-called refinancing facilities. In these facilities, bonds are not purchased but used in reverse transactions: repurchase agreements, or collateralised loans. These two transactions are similar, i.e. bonds are used as collaterals for loans, the difference being of legal nature. In the repos the ownership of the collateral changes to the ECB until the loan is repaid.

In contrast to <hl> the Fed <hl>, the ECB normally does not buy bonds outright. The normal procedure used by the ECB for manipulating the money supply has been via the so-called refinancing facilities. In these facilities, bonds are not purchased but used in reverse transactions: repurchase agreements, or collateralised loans. These two transactions are similar, i.e. bonds are used as collaterals for loans, the difference being of legal nature. In the repos the ownership of the collateral changes to the ECB until the loan is repaid.

In contrast to <hl> the Fed <hl> , the ECB normally does not buy bonds outright.


Question: What debt did the ECB focus on abtaining?

This changed with the recent sovereign-debt crisis. The ECB always could, and through the late summer of 2011 did, purchase bonds issued by the weaker states even though it assumes, in doing so, the risk of a deteriorating balance sheet. ECB buying focused primarily on Spanish and Italian debt. Certain techniques can minimise the impact. Purchases of Italian bonds by the central bank, for example, were intended to dampen international speculation and strengthen portfolios in the private sector and also the central bank.

Answer: Spanish and Italian

This changed with the recent sovereign-debt crisis. The ECB always could, and through the late summer of 2011 did, purchase bonds issued by the weaker states even though it assumes, in doing so, the risk of a deteriorating balance sheet. <hl> ECB buying focused primarily on Spanish and Italian debt. <hl> Certain techniques can minimise the impact. Purchases of Italian bonds by the central bank, for example, were intended to dampen international speculation and strengthen portfolios in the private sector and also the central bank.

This changed with the recent sovereign-debt crisis. The ECB always could, and through the late summer of 2011 did, purchase bonds issued by the weaker states even though it assumes, in doing so, the risk of a deteriorating balance sheet. ECB buying focused primarily on <hl> Spanish and Italian <hl> debt. Certain techniques can minimise the impact. Purchases of Italian bonds by the central bank, for example, were intended to dampen international speculation and strengthen portfolios in the private sector and also the central bank.


Question: What risk is assumed when the ECB purchases bonds from weaker states?

Answer: a deteriorating balance sheet

This changed with the recent sovereign-debt crisis. <hl> The ECB always could, and through the late summer of 2011 did, purchase bonds issued by the weaker states even though it assumes, in doing so, the risk of a deteriorating balance sheet . <hl> ECB buying focused primarily on Spanish and Italian debt. Certain techniques can minimise the impact. Purchases of Italian bonds by the central bank, for example, were intended to dampen international speculation and strengthen portfolios in the private sector and also the central bank.

This changed with the recent sovereign-debt crisis. The ECB always could, and through the late summer of 2011 did, purchase bonds issued by the weaker states even though it assumes, in doing so, the risk of <hl> a deteriorating balance sheet <hl>. ECB buying focused primarily on Spanish and Italian debt. Certain techniques can minimise the impact. Purchases of Italian bonds by the central bank, for example, were intended to dampen international speculation and strengthen portfolios in the private sector and also the central bank.

The ECB always could, and through the late summer of 2011 did, purchase bonds issued by the weaker states even though it assumes, in doing so, the risk of <hl> a deteriorating balance sheet <hl> .


Question: Why were italian bonds purchased by the ECB?

Answer: intended to dampen international speculation and strengthen portfolios in the private sector and also the central bank

This changed with the recent sovereign-debt crisis. The ECB always could, and through the late summer of 2011 did, purchase bonds issued by the weaker states even though it assumes, in doing so, the risk of a deteriorating balance sheet. ECB buying focused primarily on Spanish and Italian debt. Certain techniques can minimise the impact. <hl> Purchases of Italian bonds by the central bank, for example, were intended to dampen international speculation and strengthen portfolios in the private sector and also the central bank . <hl>

This changed with the recent sovereign-debt crisis. The ECB always could, and through the late summer of 2011 did, purchase bonds issued by the weaker states even though it assumes, in doing so, the risk of a deteriorating balance sheet. ECB buying focused primarily on Spanish and Italian debt. Certain techniques can minimise the impact. Purchases of Italian bonds by the central bank, for example, were <hl> intended to dampen international speculation and strengthen portfolios in the private sector and also the central bank <hl>.

Purchases of Italian bonds by the central bank, for example, were <hl> intended to dampen international speculation and strengthen portfolios in the private sector and also the central bank <hl> .


Question: What was something used to minimize the impact of the soverign-debt crisis?

Answer: Purchases of Italian bonds by the central bank

This changed with the recent sovereign-debt crisis. The ECB always could, and through the late summer of 2011 did, purchase bonds issued by the weaker states even though it assumes, in doing so, the risk of a deteriorating balance sheet. ECB buying focused primarily on Spanish and Italian debt. Certain techniques can minimise the impact. <hl> Purchases of Italian bonds by the central bank , for example, were intended to dampen international speculation and strengthen portfolios in the private sector and also the central bank. <hl>

This changed with the recent sovereign-debt crisis. The ECB always could, and through the late summer of 2011 did, purchase bonds issued by the weaker states even though it assumes, in doing so, the risk of a deteriorating balance sheet. ECB buying focused primarily on Spanish and Italian debt. Certain techniques can minimise the impact. <hl> Purchases of Italian bonds by the central bank <hl>, for example, were intended to dampen international speculation and strengthen portfolios in the private sector and also the central bank.

<hl> Purchases of Italian bonds by the central bank <hl> , for example, were intended to dampen international speculation and strengthen portfolios in the private sector and also the central bank.


Question: How does sterilisation help to keep the money flow even?

On the other hand, certain financial techniques can reduce the impact of such purchases on the currency. One is sterilisation, in which highly valued assets are sold at the same time that the weaker assets are purchased, which keeps the money supply neutral. Another technique is simply to accept the bad assets as long-term collateral (as opposed to short-term repo swaps) to be held until their market value stabilises. This would imply, as a quid pro quo, adjustments in taxation and expenditure in the economies of the weaker states to improve the perceived value of the assets.

Answer: highly valued assets are sold at the same time that the weaker assets are purchased

On the other hand, certain financial techniques can reduce the impact of such purchases on the currency. <hl> One is sterilisation, in which highly valued assets are sold at the same time that the weaker assets are purchased , which keeps the money supply neutral. <hl> Another technique is simply to accept the bad assets as long-term collateral (as opposed to short-term repo swaps) to be held until their market value stabilises. This would imply, as a quid pro quo, adjustments in taxation and expenditure in the economies of the weaker states to improve the perceived value of the assets.

On the other hand, certain financial techniques can reduce the impact of such purchases on the currency. One is sterilisation, in which <hl> highly valued assets are sold at the same time that the weaker assets are purchased <hl>, which keeps the money supply neutral. Another technique is simply to accept the bad assets as long-term collateral (as opposed to short-term repo swaps) to be held until their market value stabilises. This would imply, as a quid pro quo, adjustments in taxation and expenditure in the economies of the weaker states to improve the perceived value of the assets.

One is sterilisation, in which <hl> highly valued assets are sold at the same time that the weaker assets are purchased <hl> , which keeps the money supply neutral.


Question: What can a state do with bad assets, rather than cashing them in directly?

Answer: long-term collateral

On the other hand, certain financial techniques can reduce the impact of such purchases on the currency. One is sterilisation, in which highly valued assets are sold at the same time that the weaker assets are purchased, which keeps the money supply neutral. <hl> Another technique is simply to accept the bad assets as long-term collateral (as opposed to short-term repo swaps) to be held until their market value stabilises. <hl> This would imply, as a quid pro quo, adjustments in taxation and expenditure in the economies of the weaker states to improve the perceived value of the assets.

On the other hand, certain financial techniques can reduce the impact of such purchases on the currency. One is sterilisation, in which highly valued assets are sold at the same time that the weaker assets are purchased, which keeps the money supply neutral. Another technique is simply to accept the bad assets as <hl> long-term collateral <hl> (as opposed to short-term repo swaps) to be held until their market value stabilises. This would imply, as a quid pro quo, adjustments in taxation and expenditure in the economies of the weaker states to improve the perceived value of the assets.


Question: How can weaker states improve the surface value of their assets?

Answer: adjustments in taxation and expenditure in the economies

On the other hand, certain financial techniques can reduce the impact of such purchases on the currency. One is sterilisation, in which highly valued assets are sold at the same time that the weaker assets are purchased, which keeps the money supply neutral. Another technique is simply to accept the bad assets as long-term collateral (as opposed to short-term repo swaps) to be held until their market value stabilises. <hl> This would imply, as a quid pro quo, adjustments in taxation and expenditure in the economies of the weaker states to improve the perceived value of the assets. <hl>

On the other hand, certain financial techniques can reduce the impact of such purchases on the currency. One is sterilisation, in which highly valued assets are sold at the same time that the weaker assets are purchased, which keeps the money supply neutral. Another technique is simply to accept the bad assets as long-term collateral (as opposed to short-term repo swaps) to be held until their market value stabilises. This would imply, as a quid pro quo, <hl> adjustments in taxation and expenditure in the economies <hl> of the weaker states to improve the perceived value of the assets.


Question: By 2012, how much did the ECB spend in covering bad debt?

As of 18 June 2012, the ECB in total had spent €212.1bn (equal to 2.2% of the Eurozone GDP) for bond purchases covering outright debt, as part of its Securities Markets Programme (SMP) running since May 2010. On 6 September 2012, the ECB announced a new plan for buying bonds from eurozone countries. The duration of the previous SMP was temporary, while the Outright Monetary Transactions (OMT) programme has no ex-ante time or size limit. On 4 September 2014, the bank went further by announcing it would buy bonds and other debt instruments primarily from banks in a bid to boost the availability of credit for businesses.

Answer: €212.1bn

<hl> As of 18 June 2012, the ECB in total had spent €212.1bn (equal to 2.2% of the Eurozone GDP) for bond purchases covering outright debt, as part of its Securities Markets Programme (SMP) running since May 2010. <hl> On 6 September 2012, the ECB announced a new plan for buying bonds from eurozone countries. The duration of the previous SMP was temporary, while the Outright Monetary Transactions (OMT) programme has no ex-ante time or size limit. On 4 September 2014, the bank went further by announcing it would buy bonds and other debt instruments primarily from banks in a bid to boost the availability of credit for businesses.

As of 18 June 2012, the ECB in total had spent <hl> €212.1bn <hl> (equal to 2.2% of the Eurozone GDP) for bond purchases covering outright debt, as part of its Securities Markets Programme (SMP) running since May 2010. On 6 September 2012, the ECB announced a new plan for buying bonds from eurozone countries. The duration of the previous SMP was temporary, while the Outright Monetary Transactions (OMT) programme has no ex-ante time or size limit. On 4 September 2014, the bank went further by announcing it would buy bonds and other debt instruments primarily from banks in a bid to boost the availability of credit for businesses.


Question: How does the ECB plan to increase the available credit for businesses?

Answer: Outright Monetary Transactions

As of 18 June 2012, the ECB in total had spent €212.1bn (equal to 2.2% of the Eurozone GDP) for bond purchases covering outright debt, as part of its Securities Markets Programme (SMP) running since May 2010. On 6 September 2012, the ECB announced a new plan for buying bonds from eurozone countries. <hl> The duration of the previous SMP was temporary, while the Outright Monetary Transactions (OMT) programme has no ex-ante time or size limit. <hl> On 4 September 2014, the bank went further by announcing it would buy bonds and other debt instruments primarily from banks in a bid to boost the availability of credit for businesses.

As of 18 June 2012, the ECB in total had spent €212.1bn (equal to 2.2% of the Eurozone GDP) for bond purchases covering outright debt, as part of its Securities Markets Programme (SMP) running since May 2010. On 6 September 2012, the ECB announced a new plan for buying bonds from eurozone countries. The duration of the previous SMP was temporary, while the <hl> Outright Monetary Transactions <hl> (OMT) programme has no ex-ante time or size limit. On 4 September 2014, the bank went further by announcing it would buy bonds and other debt instruments primarily from banks in a bid to boost the availability of credit for businesses.


Question: What is the duration of the Outright Monetary Transactions program?

Answer: no ex-ante time or size limit

has no ex-ante time or size limit .

As of 18 June 2012, the ECB in total had spent €212.1bn (equal to 2.2% of the Eurozone GDP) for bond purchases covering outright debt, as part of its Securities Markets Programme (SMP) running since May 2010. On 6 September 2012, the ECB announced a new plan for buying bonds from eurozone countries. The duration of the previous SMP was temporary, while the Outright Monetary Transactions (OMT) programme <hl> has no ex-ante time or size limit . <hl> On 4 September 2014, the bank went further by announcing it would buy bonds and other debt instruments primarily from banks in a bid to boost the availability of credit for businesses.

As of 18 June 2012, the ECB in total had spent €212.1bn (equal to 2.2% of the Eurozone GDP) for bond purchases covering outright debt, as part of its Securities Markets Programme (SMP) running since May 2010. On 6 September 2012, the ECB announced a new plan for buying bonds from eurozone countries. The duration of the previous SMP was temporary, while the Outright Monetary Transactions (OMT) programme has <hl> no ex-ante time or size limit <hl>. On 4 September 2014, the bank went further by announcing it would buy bonds and other debt instruments primarily from banks in a bid to boost the availability of credit for businesses.

has <hl> no ex-ante time or size limit <hl> .


Question: When was the new idea for the purchasing of eurozone bonds announced?

Answer: 6 September 2012

As of 18 June 2012, the ECB in total had spent €212.1bn (equal to 2.2% of the Eurozone GDP) for bond purchases covering outright debt, as part of its Securities Markets Programme (SMP) running since May 2010. <hl> On 6 September 2012 , the ECB announced a new plan for buying bonds from eurozone countries. <hl> The duration of the previous SMP was temporary, while the Outright Monetary Transactions (OMT) programme has no ex-ante time or size limit. On 4 September 2014, the bank went further by announcing it would buy bonds and other debt instruments primarily from banks in a bid to boost the availability of credit for businesses.

As of 18 June 2012, the ECB in total had spent €212.1bn (equal to 2.2% of the Eurozone GDP) for bond purchases covering outright debt, as part of its Securities Markets Programme (SMP) running since May 2010. On <hl> 6 September 2012 <hl>, the ECB announced a new plan for buying bonds from eurozone countries. The duration of the previous SMP was temporary, while the Outright Monetary Transactions (OMT) programme has no ex-ante time or size limit. On 4 September 2014, the bank went further by announcing it would buy bonds and other debt instruments primarily from banks in a bid to boost the availability of credit for businesses.

On <hl> 6 September 2012 <hl> , the ECB announced a new plan for buying bonds from eurozone countries.


Question: How long was the duration of the Securities Markets Programme to last?

Answer: temporary

As of 18 June 2012, the ECB in total had spent €212.1bn (equal to 2.2% of the Eurozone GDP) for bond purchases covering outright debt, as part of its Securities Markets Programme (SMP) running since May 2010. On 6 September 2012, the ECB announced a new plan for buying bonds from eurozone countries. <hl> The duration of the previous SMP was temporary , while the Outright Monetary Transactions (OMT) programme has no ex-ante time or size limit. <hl> On 4 September 2014, the bank went further by announcing it would buy bonds and other debt instruments primarily from banks in a bid to boost the availability of credit for businesses.

As of 18 June 2012, the ECB in total had spent €212.1bn (equal to 2.2% of the Eurozone GDP) for bond purchases covering outright debt, as part of its Securities Markets Programme (SMP) running since May 2010. On 6 September 2012, the ECB announced a new plan for buying bonds from eurozone countries. The duration of the previous SMP was <hl> temporary <hl>, while the Outright Monetary Transactions (OMT) programme has no ex-ante time or size limit. On 4 September 2014, the bank went further by announcing it would buy bonds and other debt instruments primarily from banks in a bid to boost the availability of credit for businesses.

The duration of the previous SMP was <hl> temporary <hl> , while the Outright Monetary Transactions (OMT) programme has no ex-ante time or size limit.


Question: What can be shuffeled around during a soverign debt crisis to mitigate the damage?

Rescue operations involving sovereign debt have included temporarily moving bad or weak assets off the balance sheets of the weak member banks into the balance sheets of the European Central Bank. Such action is viewed as monetisation and can be seen as an inflationary threat, whereby the strong member countries of the ECB shoulder the burden of monetary expansion (and potential inflation) to save the weak member countries. Most central banks prefer to move weak assets off their balance sheets with some kind of agreement as to how the debt will continue to be serviced. This preference has typically led the ECB to argue that the weaker member countries must:

Answer: temporarily moving bad or weak assets

<hl> Rescue operations involving sovereign debt have included temporarily moving bad or weak assets off the balance sheets of the weak member banks into the balance sheets of the European Central Bank. <hl> Such action is viewed as monetisation and can be seen as an inflationary threat, whereby the strong member countries of the ECB shoulder the burden of monetary expansion (and potential inflation) to save the weak member countries. Most central banks prefer to move weak assets off their balance sheets with some kind of agreement as to how the debt will continue to be serviced. This preference has typically led the ECB to argue that the weaker member countries must:

Rescue operations involving sovereign debt have included <hl> temporarily moving bad or weak assets <hl> off the balance sheets of the weak member banks into the balance sheets of the European Central Bank. Such action is viewed as monetisation and can be seen as an inflationary threat, whereby the strong member countries of the ECB shoulder the burden of monetary expansion (and potential inflation) to save the weak member countries. Most central banks prefer to move weak assets off their balance sheets with some kind of agreement as to how the debt will continue to be serviced. This preference has typically led the ECB to argue that the weaker member countries must:


Question: Where do bad and weak assets get moved in times of soverign debt crisis?

Answer: the balance sheets of the European Central Bank

<hl> Rescue operations involving sovereign debt have included temporarily moving bad or weak assets off the balance sheets of the weak member banks into the balance sheets of the European Central Bank . <hl> Such action is viewed as monetisation and can be seen as an inflationary threat, whereby the strong member countries of the ECB shoulder the burden of monetary expansion (and potential inflation) to save the weak member countries. Most central banks prefer to move weak assets off their balance sheets with some kind of agreement as to how the debt will continue to be serviced. This preference has typically led the ECB to argue that the weaker member countries must:

Rescue operations involving sovereign debt have included temporarily moving bad or weak assets off the balance sheets of the weak member banks into <hl> the balance sheets of the European Central Bank <hl>. Such action is viewed as monetisation and can be seen as an inflationary threat, whereby the strong member countries of the ECB shoulder the burden of monetary expansion (and potential inflation) to save the weak member countries. Most central banks prefer to move weak assets off their balance sheets with some kind of agreement as to how the debt will continue to be serviced. This preference has typically led the ECB to argue that the weaker member countries must:

Rescue operations involving sovereign debt have included temporarily moving bad or weak assets off the balance sheets of the weak member banks into <hl> the balance sheets of the European Central Bank <hl> .


Question: What is shuffling around bad or weak debts from a weaker eurozone member to the ECB known as?

Answer: monetisation

Rescue operations involving sovereign debt have included temporarily moving bad or weak assets off the balance sheets of the weak member banks into the balance sheets of the European Central Bank. <hl> Such action is viewed as monetisation and can be seen as an inflationary threat, whereby the strong member countries of the ECB shoulder the burden of monetary expansion (and potential inflation) to save the weak member countries. <hl> Most central banks prefer to move weak assets off their balance sheets with some kind of agreement as to how the debt will continue to be serviced. This preference has typically led the ECB to argue that the weaker member countries must:

Rescue operations involving sovereign debt have included temporarily moving bad or weak assets off the balance sheets of the weak member banks into the balance sheets of the European Central Bank. Such action is viewed as <hl> monetisation <hl> and can be seen as an inflationary threat, whereby the strong member countries of the ECB shoulder the burden of monetary expansion (and potential inflation) to save the weak member countries. Most central banks prefer to move weak assets off their balance sheets with some kind of agreement as to how the debt will continue to be serviced. This preference has typically led the ECB to argue that the weaker member countries must:


Question: What is monetisation usually viewed as?

Answer: inflationary threat

Rescue operations involving sovereign debt have included temporarily moving bad or weak assets off the balance sheets of the weak member banks into the balance sheets of the European Central Bank. <hl> Such action is viewed as monetisation and can be seen as an inflationary threat , whereby the strong member countries of the ECB shoulder the burden of monetary expansion (and potential inflation) to save the weak member countries. <hl> Most central banks prefer to move weak assets off their balance sheets with some kind of agreement as to how the debt will continue to be serviced. This preference has typically led the ECB to argue that the weaker member countries must:

Rescue operations involving sovereign debt have included temporarily moving bad or weak assets off the balance sheets of the weak member banks into the balance sheets of the European Central Bank. Such action is viewed as monetisation and can be seen as an <hl> inflationary threat <hl>, whereby the strong member countries of the ECB shoulder the burden of monetary expansion (and potential inflation) to save the weak member countries. Most central banks prefer to move weak assets off their balance sheets with some kind of agreement as to how the debt will continue to be serviced. This preference has typically led the ECB to argue that the weaker member countries must:

Such action is viewed as monetisation and can be seen as an <hl> inflationary threat <hl> , whereby the strong member countries of the ECB shoulder the burden of monetary expansion (and potential inflation) to save the weak member countries.


Question: If the central banks can come to an agreement with the eurozone member about the continued repayment of the debt, what happens to the bad or weak debt?

Answer: move weak assets off their balance sheets

Rescue operations involving sovereign debt have included temporarily moving bad or weak assets off the balance sheets of the weak member banks into the balance sheets of the European Central Bank. Such action is viewed as monetisation and can be seen as an inflationary threat, whereby the strong member countries of the ECB shoulder the burden of monetary expansion (and potential inflation) to save the weak member countries. <hl> Most central banks prefer to move weak assets off their balance sheets with some kind of agreement as to how the debt will continue to be serviced. <hl> This preference has typically led the ECB to argue that the weaker member countries must:

Rescue operations involving sovereign debt have included temporarily moving bad or weak assets off the balance sheets of the weak member banks into the balance sheets of the European Central Bank. Such action is viewed as monetisation and can be seen as an inflationary threat, whereby the strong member countries of the ECB shoulder the burden of monetary expansion (and potential inflation) to save the weak member countries. Most central banks prefer to <hl> move weak assets off their balance sheets <hl> with some kind of agreement as to how the debt will continue to be serviced. This preference has typically led the ECB to argue that the weaker member countries must:


Question: What is being caused by links between soverign debt and failing national banks?

The European Central Bank had stepped up the buying of member nations debt. In response to the crisis of 2010, some proposals have surfaced for a collective European bond issue that would allow the central bank to purchase a European version of US Treasury bills. To make European sovereign debt assets more similar to a US Treasury, a collective guarantee of the member states' solvency would be necessary.[b] But the German government has resisted this proposal, and other analyses indicate that "the sickness of the euro" is due to the linkage between sovereign debt and failing national banking systems. If the European central bank were to deal directly with failing banking systems sovereign debt would not look as leveraged relative to national income in the financially weaker member states.

Answer: the sickness of the euro

The European Central Bank had stepped up the buying of member nations debt. In response to the crisis of 2010, some proposals have surfaced for a collective European bond issue that would allow the central bank to purchase a European version of US Treasury bills. To make European sovereign debt assets more similar to a US Treasury, a collective guarantee of the member states' solvency would be necessary.[b] <hl> But the German government has resisted this proposal, and other analyses indicate that " the sickness of the euro " is due to the linkage between sovereign debt and failing national banking systems. <hl> If the European central bank were to deal directly with failing banking systems sovereign debt would not look as leveraged relative to national income in the financially weaker member states.

The European Central Bank had stepped up the buying of member nations debt. In response to the crisis of 2010, some proposals have surfaced for a collective European bond issue that would allow the central bank to purchase a European version of US Treasury bills. To make European sovereign debt assets more similar to a US Treasury, a collective guarantee of the member states' solvency would be necessary.[b] But the German government has resisted this proposal, and other analyses indicate that "<hl> the sickness of the euro <hl>" is due to the linkage between sovereign debt and failing national banking systems. If the European central bank were to deal directly with failing banking systems sovereign debt would not look as leveraged relative to national income in the financially weaker member states.

But the German government has resisted this proposal, and other analyses indicate that " <hl> the sickness of the euro <hl> " is due to the linkage between sovereign debt and failing national banking systems.


Question: Which country has been resistant to attempts to make the soverign debt assets more like the U.S. Treasury?

Answer: the German government

The European Central Bank had stepped up the buying of member nations debt. In response to the crisis of 2010, some proposals have surfaced for a collective European bond issue that would allow the central bank to purchase a European version of US Treasury bills. To make European sovereign debt assets more similar to a US Treasury, a collective guarantee of the member states' solvency would be necessary.[b] <hl> But the German government has resisted this proposal, and other analyses indicate that "the sickness of the euro" is due to the linkage between sovereign debt and failing national banking systems. <hl> If the European central bank were to deal directly with failing banking systems sovereign debt would not look as leveraged relative to national income in the financially weaker member states.

The European Central Bank had stepped up the buying of member nations debt. In response to the crisis of 2010, some proposals have surfaced for a collective European bond issue that would allow the central bank to purchase a European version of US Treasury bills. To make European sovereign debt assets more similar to a US Treasury, a collective guarantee of the member states' solvency would be necessary.[b] But <hl> the German government <hl> has resisted this proposal, and other analyses indicate that "the sickness of the euro" is due to the linkage between sovereign debt and failing national banking systems. If the European central bank were to deal directly with failing banking systems sovereign debt would not look as leveraged relative to national income in the financially weaker member states.


Question: Who began to increase their coverage of weaker debts?

Answer: The European Central Bank

<hl> The European Central Bank had stepped up the buying of member nations debt. <hl> In response to the crisis of 2010, some proposals have surfaced for a collective European bond issue that would allow the central bank to purchase a European version of US Treasury bills. To make European sovereign debt assets more similar to a US Treasury, a collective guarantee of the member states' solvency would be necessary.[b] But the German government has resisted this proposal, and other analyses indicate that "the sickness of the euro" is due to the linkage between sovereign debt and failing national banking systems. If the European central bank were to deal directly with failing banking systems sovereign debt would not look as leveraged relative to national income in the financially weaker member states.

<hl> The European Central Bank <hl> had stepped up the buying of member nations debt. In response to the crisis of 2010, some proposals have surfaced for a collective European bond issue that would allow the central bank to purchase a European version of US Treasury bills. To make European sovereign debt assets more similar to a US Treasury, a collective guarantee of the member states' solvency would be necessary.[b] But the German government has resisted this proposal, and other analyses indicate that "the sickness of the euro" is due to the linkage between sovereign debt and failing national banking systems. If the European central bank were to deal directly with failing banking systems sovereign debt would not look as leveraged relative to national income in the financially weaker member states.


Question: What would have to happen to make European sovereign debt assets more like what is found in the U.S. Treasury?

Answer: a collective guarantee of the member states' solvency

The European Central Bank had stepped up the buying of member nations debt. In response to the crisis of 2010, some proposals have surfaced for a collective European bond issue that would allow the central bank to purchase a European version of US Treasury bills. <hl> To make European sovereign debt assets more similar to a US Treasury, a collective guarantee of the member states' solvency would be necessary.[b] <hl> But the German government has resisted this proposal, and other analyses indicate that "the sickness of the euro" is due to the linkage between sovereign debt and failing national banking systems. If the European central bank were to deal directly with failing banking systems sovereign debt would not look as leveraged relative to national income in the financially weaker member states.

The European Central Bank had stepped up the buying of member nations debt. In response to the crisis of 2010, some proposals have surfaced for a collective European bond issue that would allow the central bank to purchase a European version of US Treasury bills. To make European sovereign debt assets more similar to a US Treasury, <hl> a collective guarantee of the member states' solvency <hl> would be necessary.[b] But the German government has resisted this proposal, and other analyses indicate that "the sickness of the euro" is due to the linkage between sovereign debt and failing national banking systems. If the European central bank were to deal directly with failing banking systems sovereign debt would not look as leveraged relative to national income in the financially weaker member states.


Question: Why did propsals about making the European sovereign debt assets more like the US Treasury?

Answer: the crisis of 2010

The European Central Bank had stepped up the buying of member nations debt. <hl> In response to the crisis of 2010 , some proposals have surfaced for a collective European bond issue that would allow the central bank to purchase a European version of US Treasury bills. <hl> To make European sovereign debt assets more similar to a US Treasury, a collective guarantee of the member states' solvency would be necessary.[b] But the German government has resisted this proposal, and other analyses indicate that "the sickness of the euro" is due to the linkage between sovereign debt and failing national banking systems. If the European central bank were to deal directly with failing banking systems sovereign debt would not look as leveraged relative to national income in the financially weaker member states.

The European Central Bank had stepped up the buying of member nations debt. In response to <hl> the crisis of 2010 <hl>, some proposals have surfaced for a collective European bond issue that would allow the central bank to purchase a European version of US Treasury bills. To make European sovereign debt assets more similar to a US Treasury, a collective guarantee of the member states' solvency would be necessary.[b] But the German government has resisted this proposal, and other analyses indicate that "the sickness of the euro" is due to the linkage between sovereign debt and failing national banking systems. If the European central bank were to deal directly with failing banking systems sovereign debt would not look as leveraged relative to national income in the financially weaker member states.

In response to <hl> the crisis of 2010 <hl> , some proposals have surfaced for a collective European bond issue that would allow the central bank to purchase a European version of US Treasury bills.


Question: What did the ECB do to help stabilise the financial system during the subprime mortgage crisis?

The bank must also co-operate within the EU and internationally with third bodies and entities. Finally, it contributes to maintaining a stable financial system and monitoring the banking sector. The latter can be seen, for example, in the bank's intervention during the subprime mortgage crisis when it loaned billions of euros to banks to stabilise the financial system. In December 2007, the ECB decided in conjunction with the Federal Reserve System under a programme called Term auction facility to improve dollar liquidity in the eurozone and to stabilise the money market.

Answer: loaned billions of euros to banks

The bank must also co-operate within the EU and internationally with third bodies and entities. Finally, it contributes to maintaining a stable financial system and monitoring the banking sector. <hl> The latter can be seen, for example, in the bank's intervention during the subprime mortgage crisis when it loaned billions of euros to banks to stabilise the financial system. <hl> In December 2007, the ECB decided in conjunction with the Federal Reserve System under a programme called Term auction facility to improve dollar liquidity in the eurozone and to stabilise the money market.

The bank must also co-operate within the EU and internationally with third bodies and entities. Finally, it contributes to maintaining a stable financial system and monitoring the banking sector. The latter can be seen, for example, in the bank's intervention during the subprime mortgage crisis when it <hl> loaned billions of euros to banks <hl> to stabilise the financial system. In December 2007, the ECB decided in conjunction with the Federal Reserve System under a programme called Term auction facility to improve dollar liquidity in the eurozone and to stabilise the money market.


Question: Why did the ECB intervene during the subprime mortgage crisis?

Answer: to stabilise the financial system

The bank must also co-operate within the EU and internationally with third bodies and entities. Finally, it contributes to maintaining a stable financial system and monitoring the banking sector. <hl> The latter can be seen, for example, in the bank's intervention during the subprime mortgage crisis when it loaned billions of euros to banks to stabilise the financial system . <hl> In December 2007, the ECB decided in conjunction with the Federal Reserve System under a programme called Term auction facility to improve dollar liquidity in the eurozone and to stabilise the money market.

The bank must also co-operate within the EU and internationally with third bodies and entities. Finally, it contributes to maintaining a stable financial system and monitoring the banking sector. The latter can be seen, for example, in the bank's intervention during the subprime mortgage crisis when it loaned billions of euros to banks <hl> to stabilise the financial system <hl>. In December 2007, the ECB decided in conjunction with the Federal Reserve System under a programme called Term auction facility to improve dollar liquidity in the eurozone and to stabilise the money market.

The latter can be seen, for example, in the bank's intervention during the subprime mortgage crisis when it loaned billions of euros to banks <hl> to stabilise the financial system <hl> .


Question: Who decided, along with the ECB, to use Term auction to help stabilize the financial crisis and improve dollar liquidity?

Answer: Federal Reserve System

The bank must also co-operate within the EU and internationally with third bodies and entities. Finally, it contributes to maintaining a stable financial system and monitoring the banking sector. The latter can be seen, for example, in the bank's intervention during the subprime mortgage crisis when it loaned billions of euros to banks to stabilise the financial system. <hl> In December 2007, the ECB decided in conjunction with the Federal Reserve System under a programme called Term auction facility to improve dollar liquidity in the eurozone and to stabilise the money market. <hl>

The bank must also co-operate within the EU and internationally with third bodies and entities. Finally, it contributes to maintaining a stable financial system and monitoring the banking sector. The latter can be seen, for example, in the bank's intervention during the subprime mortgage crisis when it loaned billions of euros to banks to stabilise the financial system. In December 2007, the ECB decided in conjunction with the <hl> Federal Reserve System <hl> under a programme called Term auction facility to improve dollar liquidity in the eurozone and to stabilise the money market.


Question: Besides cooperating with other financial institutions, how does the ECB help to maintain stability?

Answer: contributes to maintaining a stable financial system and monitoring the banking sector

The bank must also co-operate within the EU and internationally with third bodies and entities. <hl> Finally, it contributes to maintaining a stable financial system and monitoring the banking sector . <hl> The latter can be seen, for example, in the bank's intervention during the subprime mortgage crisis when it loaned billions of euros to banks to stabilise the financial system. In December 2007, the ECB decided in conjunction with the Federal Reserve System under a programme called Term auction facility to improve dollar liquidity in the eurozone and to stabilise the money market.

The bank must also co-operate within the EU and internationally with third bodies and entities. Finally, it <hl> contributes to maintaining a stable financial system and monitoring the banking sector <hl>. The latter can be seen, for example, in the bank's intervention during the subprime mortgage crisis when it loaned billions of euros to banks to stabilise the financial system. In December 2007, the ECB decided in conjunction with the Federal Reserve System under a programme called Term auction facility to improve dollar liquidity in the eurozone and to stabilise the money market.

Finally, it <hl> contributes to maintaining a stable financial system and monitoring the banking sector <hl> .


Question: When did the ECB and Federal Rserve decide to collaborate on Term auction facility?

Answer: December 2007

The bank must also co-operate within the EU and internationally with third bodies and entities. Finally, it contributes to maintaining a stable financial system and monitoring the banking sector. The latter can be seen, for example, in the bank's intervention during the subprime mortgage crisis when it loaned billions of euros to banks to stabilise the financial system. <hl> In December 2007 , the ECB decided in conjunction with the Federal Reserve System under a programme called Term auction facility to improve dollar liquidity in the eurozone and to stabilise the money market. <hl>

The bank must also co-operate within the EU and internationally with third bodies and entities. Finally, it contributes to maintaining a stable financial system and monitoring the banking sector. The latter can be seen, for example, in the bank's intervention during the subprime mortgage crisis when it loaned billions of euros to banks to stabilise the financial system. In <hl> December 2007 <hl>, the ECB decided in conjunction with the Federal Reserve System under a programme called Term auction facility to improve dollar liquidity in the eurozone and to stabilise the money market.

In <hl> December 2007 <hl> , the ECB decided in conjunction with the Federal Reserve System under a programme called Term auction facility to improve dollar liquidity in the eurozone and to stabilise the money market.


Question: What is a perk of the central bank?

In central banking, the privileged status of the central bank is that it can make as much money as it deems needed. In the United States Federal Reserve Bank, the Federal Reserve buys assets: typically, bonds issued by the Federal government. There is no limit on the bonds that it can buy and one of the tools at its disposal in a financial crisis is to take such extraordinary measures as the purchase of large amounts of assets such as commercial paper. The purpose of such operations is to ensure that adequate liquidity is available for functioning of the financial system.

Answer: it can make as much money as it deems needed

<hl> In central banking, the privileged status of the central bank is that it can make as much money as it deems needed . <hl> In the United States Federal Reserve Bank, the Federal Reserve buys assets: typically, bonds issued by the Federal government. There is no limit on the bonds that it can buy and one of the tools at its disposal in a financial crisis is to take such extraordinary measures as the purchase of large amounts of assets such as commercial paper. The purpose of such operations is to ensure that adequate liquidity is available for functioning of the financial system.

In central banking, the privileged status of the central bank is that <hl> it can make as much money as it deems needed <hl>. In the United States Federal Reserve Bank, the Federal Reserve buys assets: typically, bonds issued by the Federal government. There is no limit on the bonds that it can buy and one of the tools at its disposal in a financial crisis is to take such extraordinary measures as the purchase of large amounts of assets such as commercial paper. The purpose of such operations is to ensure that adequate liquidity is available for functioning of the financial system.

In central banking, the privileged status of the central bank is that <hl> it can make as much money as it deems needed <hl> .


Question: What kinds of assets does the US Federal Reserve buy?

Answer: bonds issued by the Federal government

In central banking, the privileged status of the central bank is that it can make as much money as it deems needed. <hl> In the United States Federal Reserve Bank, the Federal Reserve buys assets: typically, bonds issued by the Federal government . <hl> There is no limit on the bonds that it can buy and one of the tools at its disposal in a financial crisis is to take such extraordinary measures as the purchase of large amounts of assets such as commercial paper. The purpose of such operations is to ensure that adequate liquidity is available for functioning of the financial system.

In central banking, the privileged status of the central bank is that it can make as much money as it deems needed. In the United States Federal Reserve Bank, the Federal Reserve buys assets: typically, <hl> bonds issued by the Federal government <hl>. There is no limit on the bonds that it can buy and one of the tools at its disposal in a financial crisis is to take such extraordinary measures as the purchase of large amounts of assets such as commercial paper. The purpose of such operations is to ensure that adequate liquidity is available for functioning of the financial system.

In the United States Federal Reserve Bank, the Federal Reserve buys assets: typically, <hl> bonds issued by the Federal government <hl> .


Question: What kind of asset will the Federal Reserve purchase in mass quantities at a time of crisis?

Answer: commercial paper

In central banking, the privileged status of the central bank is that it can make as much money as it deems needed. In the United States Federal Reserve Bank, the Federal Reserve buys assets: typically, bonds issued by the Federal government. <hl> There is no limit on the bonds that it can buy and one of the tools at its disposal in a financial crisis is to take such extraordinary measures as the purchase of large amounts of assets such as commercial paper . <hl> The purpose of such operations is to ensure that adequate liquidity is available for functioning of the financial system.

In central banking, the privileged status of the central bank is that it can make as much money as it deems needed. In the United States Federal Reserve Bank, the Federal Reserve buys assets: typically, bonds issued by the Federal government. There is no limit on the bonds that it can buy and one of the tools at its disposal in a financial crisis is to take such extraordinary measures as the purchase of large amounts of assets such as <hl> commercial paper <hl>. The purpose of such operations is to ensure that adequate liquidity is available for functioning of the financial system.

There is no limit on the bonds that it can buy and one of the tools at its disposal in a financial crisis is to take such extraordinary measures as the purchase of large amounts of assets such as <hl> commercial paper <hl> .


Question: What is the purpose of buying commercial paper in a time of financial crisis?

Answer: to ensure that adequate liquidity is available for functioning

In central banking, the privileged status of the central bank is that it can make as much money as it deems needed. In the United States Federal Reserve Bank, the Federal Reserve buys assets: typically, bonds issued by the Federal government. There is no limit on the bonds that it can buy and one of the tools at its disposal in a financial crisis is to take such extraordinary measures as the purchase of large amounts of assets such as commercial paper. <hl> The purpose of such operations is to ensure that adequate liquidity is available for functioning of the financial system. <hl>

In central banking, the privileged status of the central bank is that it can make as much money as it deems needed. In the United States Federal Reserve Bank, the Federal Reserve buys assets: typically, bonds issued by the Federal government. There is no limit on the bonds that it can buy and one of the tools at its disposal in a financial crisis is to take such extraordinary measures as the purchase of large amounts of assets such as commercial paper. The purpose of such operations is <hl> to ensure that adequate liquidity is available for functioning <hl> of the financial system.


Question: Which agencies have became the authority on assessing the risk of financial institutions?

Think-tanks such as the World Pensions Council have also argued that European legislators have pushed somewhat dogmatically for the adoption of the Basel II recommendations, adopted in 2005, transposed in European Union law through the Capital Requirements Directive (CRD), effective since 2008. In essence, they forced European banks, and, more importantly, the European Central Bank itself e.g. when gauging the solvency of financial institutions, to rely more than ever on standardised assessments of credit risk marketed by two non-European private agencies: Moody's and S&P.

Answer: Moody's and S&P

Think-tanks such as the World Pensions Council have also argued that European legislators have pushed somewhat dogmatically for the adoption of the Basel II recommendations, adopted in 2005, transposed in European Union law through the Capital Requirements Directive (CRD), effective since 2008. <hl> In essence, they forced European banks, and, more importantly, the European Central Bank itself e.g. when gauging the solvency of financial institutions, to rely more than ever on standardised assessments of credit risk marketed by two non-European private agencies: Moody's and S&P . <hl>

Think-tanks such as the World Pensions Council have also argued that European legislators have pushed somewhat dogmatically for the adoption of the Basel II recommendations, adopted in 2005, transposed in European Union law through the Capital Requirements Directive (CRD), effective since 2008. In essence, they forced European banks, and, more importantly, the European Central Bank itself e.g. when gauging the solvency of financial institutions, to rely more than ever on standardised assessments of credit risk marketed by two non-European private agencies: <hl> Moody's and S&P <hl>.

In essence, they forced European banks, and, more importantly, the European Central Bank itself e.g. when gauging the solvency of financial institutions, to rely more than ever on standardised assessments of credit risk marketed by two non-European private agencies: <hl> Moody's and S&P <hl> .


Question: When was Basel II adopted?

Answer: 2005

<hl> Think-tanks such as the World Pensions Council have also argued that European legislators have pushed somewhat dogmatically for the adoption of the Basel II recommendations, adopted in 2005 , transposed in European Union law through the Capital Requirements Directive (CRD), effective since 2008. <hl> In essence, they forced European banks, and, more importantly, the European Central Bank itself e.g. when gauging the solvency of financial institutions, to rely more than ever on standardised assessments of credit risk marketed by two non-European private agencies: Moody's and S&P.

Think-tanks such as the World Pensions Council have also argued that European legislators have pushed somewhat dogmatically for the adoption of the Basel II recommendations, adopted in <hl> 2005 <hl>, transposed in European Union law through the Capital Requirements Directive (CRD), effective since 2008. In essence, they forced European banks, and, more importantly, the European Central Bank itself e.g. when gauging the solvency of financial institutions, to rely more than ever on standardised assessments of credit risk marketed by two non-European private agencies: Moody's and S&P.

Think-tanks such as the World Pensions Council have also argued that European legislators have pushed somewhat dogmatically for the adoption of the Basel II recommendations, adopted in <hl> 2005 <hl> , transposed in European Union law through the Capital Requirements Directive (CRD), effective since 2008.


Question: What said that agencies had to start using Moody's and S&P to assess financial institutions?

Answer: the Basel II recommendations

<hl> Think-tanks such as the World Pensions Council have also argued that European legislators have pushed somewhat dogmatically for the adoption of the Basel II recommendations , adopted in 2005, transposed in European Union law through the Capital Requirements Directive (CRD), effective since 2008. <hl> In essence, they forced European banks, and, more importantly, the European Central Bank itself e.g. when gauging the solvency of financial institutions, to rely more than ever on standardised assessments of credit risk marketed by two non-European private agencies: Moody's and S&P.

Think-tanks such as the World Pensions Council have also argued that European legislators have pushed somewhat dogmatically for the adoption of <hl> the Basel II recommendations <hl>, adopted in 2005, transposed in European Union law through the Capital Requirements Directive (CRD), effective since 2008. In essence, they forced European banks, and, more importantly, the European Central Bank itself e.g. when gauging the solvency of financial institutions, to rely more than ever on standardised assessments of credit risk marketed by two non-European private agencies: Moody's and S&P.

Think-tanks such as the World Pensions Council have also argued that European legislators have pushed somewhat dogmatically for the adoption of <hl> the Basel II recommendations <hl> , adopted in 2005, transposed in European Union law through the Capital Requirements Directive (CRD), effective since 2008.


Question: Since when have the Basel II recommendations been in effect?

Answer: 2008

<hl> Think-tanks such as the World Pensions Council have also argued that European legislators have pushed somewhat dogmatically for the adoption of the Basel II recommendations, adopted in 2005, transposed in European Union law through the Capital Requirements Directive (CRD), effective since 2008 . <hl> In essence, they forced European banks, and, more importantly, the European Central Bank itself e.g. when gauging the solvency of financial institutions, to rely more than ever on standardised assessments of credit risk marketed by two non-European private agencies: Moody's and S&P.

Think-tanks such as the World Pensions Council have also argued that European legislators have pushed somewhat dogmatically for the adoption of the Basel II recommendations, adopted in 2005, transposed in European Union law through the Capital Requirements Directive (CRD), effective since <hl> 2008 <hl>. In essence, they forced European banks, and, more importantly, the European Central Bank itself e.g. when gauging the solvency of financial institutions, to rely more than ever on standardised assessments of credit risk marketed by two non-European private agencies: Moody's and S&P.

Think-tanks such as the World Pensions Council have also argued that European legislators have pushed somewhat dogmatically for the adoption of the Basel II recommendations, adopted in 2005, transposed in European Union law through the Capital Requirements Directive (CRD), effective since <hl> 2008 <hl> .


Question: Where is the European Central bank located?

The bank is based in Frankfurt, the largest financial centre in the Eurozone. Its location in the city is fixed by the Amsterdam Treaty. The bank moved to new purpose-built headquarters in 2014 which were designed a Vienna-based architectural office named Coop Himmelbau. The building is approximately 180 metres (591 ft) tall and will be accompanied with other secondary buildings on a landscaped site on the site of the former wholesale market in the eastern part of Frankfurt am Main. The main construction began in October 2008, and it was expected that the building will become an architectural symbol for Europe. While it was designed to accommodate double the number of staff who operate in the former Eurotower, that building has been retained since the ECB took responsibility for banking supervision and more space was hence required.

Answer: Frankfurt

<hl> The bank is based in Frankfurt , the largest financial centre in the Eurozone. <hl> Its location in the city is fixed by the Amsterdam Treaty. The bank moved to new purpose-built headquarters in 2014 which were designed a Vienna-based architectural office named Coop Himmelbau. The building is approximately 180 metres (591 ft) tall and will be accompanied with other secondary buildings on a landscaped site on the site of the former wholesale market in the eastern part of Frankfurt am Main. The main construction began in October 2008, and it was expected that the building will become an architectural symbol for Europe. While it was designed to accommodate double the number of staff who operate in the former Eurotower, that building has been retained since the ECB took responsibility for banking supervision and more space was hence required.

The bank is based in <hl> Frankfurt <hl>, the largest financial centre in the Eurozone. Its location in the city is fixed by the Amsterdam Treaty. The bank moved to new purpose-built headquarters in 2014 which were designed a Vienna-based architectural office named Coop Himmelbau. The building is approximately 180 metres (591 ft) tall and will be accompanied with other secondary buildings on a landscaped site on the site of the former wholesale market in the eastern part of Frankfurt am Main. The main construction began in October 2008, and it was expected that the building will become an architectural symbol for Europe. While it was designed to accommodate double the number of staff who operate in the former Eurotower, that building has been retained since the ECB took responsibility for banking supervision and more space was hence required.

The bank is based in <hl> Frankfurt <hl> , the largest financial centre in the Eurozone.


Question: What decided where the bank was to be located?

Answer: Amsterdam Treaty

The bank is based in Frankfurt, the largest financial centre in the Eurozone. <hl> Its location in the city is fixed by the Amsterdam Treaty . <hl> The bank moved to new purpose-built headquarters in 2014 which were designed a Vienna-based architectural office named Coop Himmelbau. The building is approximately 180 metres (591 ft) tall and will be accompanied with other secondary buildings on a landscaped site on the site of the former wholesale market in the eastern part of Frankfurt am Main. The main construction began in October 2008, and it was expected that the building will become an architectural symbol for Europe. While it was designed to accommodate double the number of staff who operate in the former Eurotower, that building has been retained since the ECB took responsibility for banking supervision and more space was hence required.

The bank is based in Frankfurt, the largest financial centre in the Eurozone. Its location in the city is fixed by the <hl> Amsterdam Treaty <hl>. The bank moved to new purpose-built headquarters in 2014 which were designed a Vienna-based architectural office named Coop Himmelbau. The building is approximately 180 metres (591 ft) tall and will be accompanied with other secondary buildings on a landscaped site on the site of the former wholesale market in the eastern part of Frankfurt am Main. The main construction began in October 2008, and it was expected that the building will become an architectural symbol for Europe. While it was designed to accommodate double the number of staff who operate in the former Eurotower, that building has been retained since the ECB took responsibility for banking supervision and more space was hence required.

Its location in the city is fixed by the <hl> Amsterdam Treaty <hl> .