Unsellable bonds structured to abuse ECB scheme

Author: | Published: 4 Sep 2008

The integrity of the European Central Bank's liquidity scheme is in doubt, with reports that commercially unviable bonds are being created to offload illiquid assets.

The ECB has injected liquidity into the market with financing in exchange for collateral. Doubts about the quality of this collateral have been growing for months, but the extent of the...