buiter40_DANIEL ROLANDAFP via Getty Images_ecb

Станет ли новый европейский TPI банкоматом?

Jul 22, 2022 Willem H. Buiter

НЬЮ-ЙОРК. Свершилось. Европейский центральный банк запустил инструмент защиты передачи средств (TPI) для предотвращения фрагментации денежно-кредитной политики в еврозоне. Объявленный сразу после заседания Совета управляющих ЕЦБ 21 июля, индекс потребительских цен затмил новость о том, что ЕЦБ повысит свою процентную ставку на 50 базисных пунктов, что больше, чем ожидалось, но меньше, чем требуют макроэкономическая ситуация и мандат ценовой стабильности.

Согласно пресс-релизу ЕЦБ, TPI «станет дополнением к инструментарию совета управляющих и может быть активирован для противодействия необоснованной, беспорядочной динамике рынка, представляющей серьезную угрозу распространению денежно-кредитной политики по всей еврозоне».

Я вижу экономические аргументы в пользу создания механизма, который будет действовать в качестве маркет-мейкера последней инстанции или, скорее, в качестве покупателя последней инстанции, когда рыночная ликвидность существенно снижается на рынках суверенного долга (и на системно важных рынках частных ценных бумаг). Финансовые рынки могут быть непостоянными и ненадежными. Это сложные, нелинейные системы, которые могут хаотично колебаться от иррационального изобилия к необоснованному упадку. Самоподтверждающиеся приступы страха и паники могут привести к иссяканию рыночной ликвидности. В мире множественных равновесий даже технически эффективные финансовые рынки могут порождать нежелательные ценовые пузыри, приводящие к самореализующимся долговым кризисам и дефолтам.

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0 Comments on this paragraph, 8 Comments on this article

Frans Withofs Jul 23, 2022

To me TPI seems to be another way to circumvent a way to issue common Euro Bonds without any democratic decision-making or a treaty change.In fact the debt of those countries will be guaranteed by de ECB.
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vic lai Jul 23, 2022

The ECB, as its name implies, is a European Central Bank that should mainly cater to the needs of the commercial banks of the EU nations, not to the specific needs of the individual EU national governments.
The ECB's QE programme should only serve as an ad hoc facility to cope with the special needs of some or all of the EU nations at contingent circumstances, by acting as the lender or dealer of last resort, say immediately after the breaking out of a severe financial crisis in the Euro-zone, and so the QE programmes shouldn't be set up as a standing facility to worsen the problem of moral hazard, let alone inventing the new TPI to further strengthen and lengthen the existing QE facilities.
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A suitable widening of the interest rate spreads between the stronger and weaker EU nations should be allowed, to let the free market determine clearly which nations to lend more to and at what risk-compensated interest rates, to help mitigate the persistent moral hazard problem.
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As suggested by Richard Werner a very long time ago, the southern EU nations in need of more government deficit spendings, and hence more issuance of national government bonds, to help fight internal devaluation and domestic stagnation, as a result of their countries' "overvalued exchange rates," can simply borrow from their countries' own commercial banks, say by imitating China's similar local governments, through the setting up of their own national government financing vehicles (NGFVs), which are special-purpose-vehicle-like financing Funds, the debts incurred by which should not be rerouted to the national governments' yearly recurrent fiscal balances.
The commercial banks in those southern EU countries, like the ECB's coming TPI, simply create the money out of thin air to finance the needs of their own national governments, thereby in essence practising Modern Money Theory in an indirect manner.
The loans of the national governments owed to their commercial banks can be rolled over constantly, or securitised to be bought if not by the free market then by the ECB herself, thereby buying valuable time for hopefully much faster economic growth in the future to mitigate the accumulated debt problems of these southern EU countries.
The securitized debts so created can further increase the amount of collaterals that can be used in the global Eurodollar markets.
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- vic lai Jul 24, 2022
  
  In today's EU, Germany, like today's US relative to the rest of the world, is the cleanest dirty shirt relative to all the other member countries there.
  But perhaps not for long, because even net-energy-importing Germany, a traditional exporting powerhouse, may run into persistent current account deficits year-in and year-out if the current Ukraine War persists for many years, forcing the German national government to have to break the fiscal constraint once again and deficit-spend much more than before to prevent the nation from falling into economic recessions.
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  This also means the German government, and most other north EU countries as well, will also have to borrow frequently from the newly installed "ATM" called TPI, particularly if the EU as a whole, facing probable coming oppositions from both the US and China, can no longer "steal" the global exports market-share from the rest of the world through continued non-trivial depreciation of the Euro relative to both the US dollar and the Chinese yuan.
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  It seems that the EU as a whole will continue to rely mainly or solely on the ECB to help solve most of the economic and even political problems of both the EU and the Euro.
  If all their economic and political problems can simply be solved by printing more money alone then it's really too good to be true.
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  - vic lai Jul 24, 2022
    
    In the good old days, before
    (i) the ongoing deglobalization movement,
    (ii) the latest global pandemic, and
    (iii) the ongoing Russia-Ukraine War,
    more money printing by the West still worked, because the East still met West, and so the necessary goods and services, and commodities and energies, will reliably be supplied on time by the East to maintain the relative purchasing power of the West's over-printed currencies.
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    But today, this is no longer the case, because the West's much bigger clockwise monetary flow will no longer be completely or reliably met by a commensurate and counterclockwise real-goods flow of the East.
    Continued debasements of the currencies of the West will only mean higher and higher persistent domestic inflations in their own countries, reminding us of what had been happening in the latter stages of the declining ancient Roman Empire two millennia ago, which looked like a train crash in (very) slow motion.
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    - vic lai Jul 24, 2022
      
      Neither US's recent "QE for the people," which has much bid up the inflation rate, nor EU's latest "QE for the EU national governments, " which means just keeping kicking the can down the road, can really solve the West's current main problem of the East's accelerated catching-up with her.
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      Only "QE for real technological investments" in the West, utilizing the best scientists, engineers, managers, and entrepreneurs there, with their governments in collaboration with their best innovative corporations and universities, through massive increases in real productivities and real wages of their workers in the coming decades, can the West run much faster than before, and so eventually pull herself out of her precent macroeconomic and geopolitical predicament, sustain the real purchasing power of her currency, and continue to lead the rest of the world.
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      - vic lai Jul 24, 2022
        
        The TPI's ATM-like function may aggravate the inflation problem not only in the southern EU countries but ultimately in the northern part of the EU region as well.
        Since inflation is also a form of taxation, this unlimited-QE-like TPI arrangement is in essence also a form of indirect fiscal transfer mechanism, resembling the missing common EU Fiscal Union, requiring also the other residents in the northern EU countries to pay more taxes to help finance the increased deficit spending of the southern EU countries.
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        So, why not formally set up a common EU Fiscal Union ?
        The bonds issued by the Fiscal Union will be as safe as the US treasuries if they are well managed, and can provide one more sorely-needed safe asset (EuroEuro) to the global financial markets, enabling the Euro to compete directly with the US dollar for global hegemony, and mitigate the current flight-to-safety problem by much reducing the capital outflow from the EU region to the US, thereby reversing the ongoing trend of the Euro's falling to below parity with the US dollar.
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        vic lai Jul 25, 2022
        
        If the Euro (or the Chinese yuan) wants to take on the US dollar in the global financial arena in the coming decades, the EU must, among many other things, quickly develop a big and deep enough government treasury market of her own, through which the EuroEuros (or Euroyuans), after acting as the transacting currencies between any two trading or transacting countries on this planet, can easily and quickly find a safe parking place to act as the temporary abode of the currency's future purchasing, investing, and lending power.
        The parking place will also attract capital inflow from every corner of the world when the flight-to-safety urge suddenly props up in contingent circumstance.
        For the EU as a whole, the German Bund market alone is too small to compete with the US dollar's super-big global treasury market, and so only the common Euro bonds issued collectively by the still-missing EU Fiscal Union can form a big and deep enough market to accomplish this mission.
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        In doing so, the EU has to forsake Sound Finance advocated by neoliberalism, and instead adopts Functional Finance as suggested by Modern Money Theory, which is a particularly difficult change in accepted ideology for the German people, given their own financial history.
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        Both Pax Britannica in the 19th century and Pax Americana since 1945 share one important thing in common ------ their central governments had both been highly and "precariously" in debt most of the time, not only to their own residents but to the foreigners as well, and their government debts simply kept on rising over the decades.
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        Sound Finance traditionally adopted by the EU, in the form of balanced or surplus fiscal budgets year-in and year-out, can never propel the Euro (nor the yuan) to a high enough orbit which enables the currency to genuinely challenge the current global hegemony of the US dollar.
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