Increasing ECB liquidity is the right move

Author: | Published: 17 Nov 2008

The European Central Bank (ECB)'s announcement that it is expanding its list of accepted assets has reignited fears that banks will shift junk bonds to the ECB and become over-reliant on its funding.

But European lawyers argue this is not a problem. These "radical" moves are exactly what the market requires.

Under the new regulations the ECB will grant unlimited liquidity to European banks, and start accepting BBB- rated...