Spain rallies as ECB collateral move provides relief

[dkf]

LONDON (Reuters) - Spanish bonds rallied for a fourth consecutive day on Friday after the ECB relaxed its collateral rules, bolstering investors' conviction that policymakers were taking steps to alleviate pressure on the euro zone's fourth largest economy.

The European Central Bank said it would allow financial institutions to pledge a wider range of assets, including collateral of a lower quality, in exchange for cash at its regular monetary operations.

The move was designed to help ease pressure on Spanish banks whose deteriorating assets have restricted access to much-needed ECB cash. Because Spain's banks are the main buyers of Spanish government debt, the move helped push down bond yields.

"The ECB had to do it help the Spanish banks, to give them some kind of relief so they would still have a sufficient collateral base," said Niels From, chief analyst at Nordea.

http://m.cnbc.com/us_news/47921385

[edhopper]

1. The Banks are saved!

woop de do. Unfortunately they must destroy the people to do so.
Austerity now, austerity tomorrow, austerity forever!