Only ECB has power to 'scare' global stock markets, warns IMF

[alp227]

Source: The Guardian

The International Monetary Fund has warned that the immense firepower of the European Central Bank (ECB) would be needed to "scare" the financial markets and prevent an intensification of the turmoil threatening to send the global economy back into recession.

With investors poised to give their verdict tomorrow on the weekend talks in Washington of finance ministers and central bank governors, European policymakers insisted that fresh moves to scale up the fighting fund to support struggling members of the single currency were in the offing.

Brussels has a deadline of the Cannes G20 summit in early November to flesh out its proposals but is waiting for a key vote in the German parliament this week on the expansion of the European Financial Stability Facility (EFSF) before deciding how best to turn the €440bn (£380bn) pot of capital into a €2tn war chest.

"We need to find a mechanism where we can turn one euro in the EFSF into five, but there is no decision on how we could do that yet," one senior European official said. Some European countries, including Germany, are sceptical about using the ECB to provide the leverage but the International Monetary Fund (IMF) insisted there was no alternative.

Read more: http://www.guardian.co.uk/business/2011/sep/25/ecb-power-financial-crisis-imf

[truedelphi]

1. Oh Noes! Weapons of Mass Economic Terror! Empty your pockets people of the world!

Yet another <yawn> warning from those in power that we will all die if we don't turn over our lives to them.

I live in an area of the world where the local economy is far more dependent on the "secret" growing and harvesting of an illegal herb than on the stock market.

And the people that live here are much nicer than the types you find running the Financial districts all over the "civilized" world. They are willing to help each other, rather diss each other. Fun-loving rather than the pure blatant snobbery that surrounds the Wall Street types.

[davidwparker]

2. Tax the super rich. Have Greece pull out of the Eurozone

band back its drachma with its gold. Tell the investors, sorry but you loose.

These things work.