Christine Lagarde, the nominee to be the European Central Bank’s next president, vows for the issuance of financial instruments that group bonds from different EU member countries which could act as refuge assets and increase the supply of bonds with high credit quality in the EMU.
The objective is to increase the demand for European bonds, strengthen the relevance of the Euro and serve as an instrument of monetary policy. Lagarde added that this instrument should be analyzed for the medium-long term because at the present time it is not strictly necessary.
This has been an ongoing debate within the EMU for quite some time, Bankinter research team members remind. “The issuance of these instruments would be positive due to the arguments made by Lagarde although their short-term impact would be null since it is a medium / long-term project.”