The nod-and-wink lender of last resort

How unlimited are 'unlimited' purchases of sovereign bonds, and can the ECB legally accept losses on par with private creditors?


At his press conference on December 4, 2014, the ECB President Mario Draghi was asked if the ECB would be pari passu with other creditors. Mr. Draghi replied:

“[…] we don't want to cause unintended monetary policy tightening in choosing forms of seniority which would be counter-productive. You all see this point, I believe.”


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