(Chapter 21) European financial stability mechanism can play founded declared: the protection of the member countries, the financial stability function?


European financial stability mechanism is what kind of an international organization?


European Financial Stability Facility, established in May 2010, established objectives are: to protect the financial stability of member states, a collection of the total funds, about $ 750 billion.

EFSF各國出資比例: EFSF countries funded ratio:
Country 資金(百萬歐元)
Funds (in millions of euros) 百分比(%)Percentage (%)
奧地利 Austria 12,241.43 2.78%
比利時 Belgium 15,292.18 3.48%
賽普路斯 Cyprus 863.09 0.20%
芬蘭 Finland 7,905.20 1.80%
法國 France 89,657.45 20.38%
德國 Germany 119,390.07 27.13%
希臘 Greece 12,387.70 2.82%
愛爾蘭 Ireland 7,002.40 1.59%
義大利 Italy 78,784.72 17.91%
盧森堡 Luxembourg 1,101.39 0.25%
馬爾他 Malta 398.44 0.09%
荷蘭 Netherlands 25,143.58 5.71%
葡萄牙 Portugal 11,035.38 2.51%
斯洛伐克 Slovakia 4,371.54 0.99%
斯洛文尼亞 Slovenia 2,072.92 0.47%
西班牙 Spain 52,352.51 11.90%
合計 Total 440,000.00 100%

那麼, EFSF究竟是一個甚麼性質的組織?為甚麼這一個組織,被稱為是:歐洲經濟危機的最後一根救命稻草?

In May 2010, the euro zone debt crisis, further deepening the European Central Bank and the European member countries, the face of economic recession, the nation’s leaders in Europe, concerns about the financial crisis would erupt, affecting the banks within the euro zone cannot solve the funding shortage, and the EFSF was set up in a crisis.
Then, the European financial stability mechanism is exactly what kind of an organization?
Why is this an organization known as: the last one of Europe’s economic crisis, life-saving prescription?

1 歐洲金融穩定機制,對歐洲銀行,面對金融危機,會有甚麼幫助:

1 European financial stability mechanism for the involvement of a financial crisis, European banks, what will help?

European Financial Stability Facility operational processed:
(1) 借款超額擔保120%擔保上限4400億歐元
(1) the borrower over guarantee a 120% guarantee up to € 440 billion
(2) to improve the euro area, Member States lending mechanism
(3) guarantee the proportion of subscribed capital ratio in accordance with EBC
(4) shall operate under the joint program of the euro area with the IMF

(5) by the participating the EFSF secured countries, to decide whether to provide financing services

By the countries involved in guarantees to decide whether to provide


While the European Central Bank, have done everything it can to try and help the European member countries, to avoid the spread of the debt crisis.


However, until today, Europe’s economic crisis situation, but no decline, but a growing trend, the reason is that: the European Central Bank, the early underestimated the true situation of the debt crisis in Italy.


Italy’s debt crisis is definitely not as simple as investors had thought.


The reason: Italy is a populous country. Italy’s long-term financial and taxation policies, there are serious loopholes. People, corporate tax avoidance, the situation is very serious. Lead to sovereign debt crisis, the accumulation and deepening. Although still not so obvious, but once the debt crisis spread, then, the debt crisis in Italy, will be out of control, therefore, only request EFSF to help.

The five countries each month the total debt due
國家 希臘 愛爾蘭 西班牙 葡萄牙 意大利 五國每月到期債款
country Greece Ireland Spain Portugal Italy the total debt due a month
01-2012 43.60 4.74 154.47 39.63 165.95 408.39
02-2012 25.07 0.04 150.37 42.53 630.50 848.51
03-2012 174.51 62.09 94.86 28.32 516.98 876.76
04-2012 20.68 13.03 268.94 10.11 463.92 776.68
05-2012 115.46 0.00 89.23 3.68 194.47 402.84
06-2012 29.91 6.39 67.58 120.49 111.95 336.32
07-2012 30.49 0.00 315.83 10.54 271.16 628.02
08-2012 96.79 0.05 75.44 3.90 280.27 456.45
09-2012 10.19 0.19 78.15 6.12 263.73 358.38
10-2012 11.75 12.01 316.81 17.75 292.34 650.66
11-2012 0.87 0.00 28.53 0.52 227.78 257.70
12-2012 23.35 0.36 57.93 14.74 407.37 503.75
總債款 582.67 98.90 1698.14 298.33 3826.42 6504.46
資料來源: Bloomberg

2 歐元區設立EFSF的另一個原因是:

Another reason for the euro area set up EFSF is:


From the perspective of the historical background, the European member countries, people’s thoughts and actions, the pace has always been at odds. Therefore, the European member countries did not come up with the spirit of the tide over the crisis. On the contrary, people in some countries in Europe: the normal operation of our country’s financial system, why should we come up with money to help countries in financial difficulties? They showed: things are not related to their own country, why should we care about the attitude of the financial crisis.

EFSF the establishment of only one-way measures, the EFSF between the member countries cannot produce a complementary effect.

雖然:歐洲中央銀行,尚.克勞德.特里謝 行長,不斷呼籲各個國家,應當採取相應的措施,防止債務危機的蔓延。

Although the European Central Bank, Jean-Claude Richet has repeatedly called on all countries should take appropriate measures to prevent the spread of the debt crisis.


However, many countries did not feel the debt crisis, the reaction is quite indifferent, therefore, the then leader of the European countries believe that only the creation of the EFSF, to be able to cope with the financial crisis.

3 EFSF設立後,能夠解決金融危機中的實質問題嗎?

3 After the EFSF set up, able to resolve the substantive issues in the financial crisis?


In May 2010, Europe’s political leaders, alerted to the outbreak of the financial crisis will be, in order to be able to join hands to take measures to deal with the difficult to resolve the situation, so a collection of individual euro area countries, co-founder of the European financial stability mechanism, the aim is to avoid some countries in the euro area, the financial chaos. As a result, some European countries, a collection of $ 750 billion to help possible future collapse of the national financial system.


From the definition of a financial stability mechanism can indeed help in some European countries, temporary relief from the debt crisis. However, with the spread of the financial crisis, today, want to eradicate the crisis, but it is impossible and therefore, countries around the world work together to improve the economic situation, can only be more perfect, to help Europe through the difficult.


in fact, the European Central Bank and Federal Reserve Board, in order to save the debt crisis in Europe, to prepare contingency measures is to inject ultra-high mobility of cash used to flooded Europe and the U.S. financial system to ensure the Lehman event does not repeat itself, meaning that: leader of the United States and Europe, will not allow large financial institutions, the collapse of the wave.

4 2011年歐洲中央銀行,已經向銀行業,推出近 5000億歐元的 3年期 1厘低息貸款措施(即所謂的 LTRO),超過 500間歐資銀行參與,當中有中、小型銀行,只是為了拆入資金,來補充銀行的現金流;

2011 the European Central Bank to the banking sector, the introduction of nearly 500 billion euros in three years of 1% low-interest loans measures (i.e. the so-called LTRO), more than 500 banks in Europe to participate in them, and small banks, but in order to borrowing money to supplement the bank’s cash flow;

也有大型銀行,拆入資金後,繼而買入年利率 5至 7厘的歐洲債券,賺取利息差額,隨後又把債券,存在放歐洲中央銀行,作為循環貸款的抵押品,銀行這些舉措,實際上,已經變相成為了一種,另類的量化寬鬆措施。實際運作上:歐洲中央銀行內,並沒有放貸給銀行相同數額的現金。

Large banks, the capital borrowed, and then buy the interest rate of 5-7% of European bonds, earn interest margin, then again the bonds, there is the release of the European Central Bank as collateral for the revolving loan, the banks of these initiatives, the actual has become an alternative quantitative easing measures. The actual operation: the European Central Bank does not lend to banks, the same amount of cash.

資金的來源:其實是歐洲中央銀行透過與美國聯儲局,預先安排好的, 1萬億美元兌歐元的貨幣掉期合約。

The source of funds: in fact, is through with the U.S. Federal Reserve, European Central Bank, pre-arranged $ 1 trillion against the euro currency swap contracts.


Within the U.S. Federal Reserve Board, in fact, did not have $ 1 trillion in cash, the so-called currency swaps, in fact, exist between the two central banks, a balance sheet, the addend, subtrahend to confirm or the operation of printing money.


The next few months, I almost expected the bad news of the Eurobond will be frequent and repeated, the European Central Bank and the U.S. Federal Reserve Board, has entered, start at any time, ultra-loose quantitative easing measures.

金融市場預期:2012年 2月 29日,歐洲中央銀行推出的第二輪 LTRO,將會累計拆出達 1萬億歐元的貸款。筆者認為:最終投入的資金額度,會視乎美國聯儲局,是否會同步參與。

Financial market expectations: February 29, 2012, the European Central Bank launched the second round of LTRO will be cumulative demolition of up to € 1 trillion of loans. I believe that: the final amount of capital invested will depend on the U.S. Federal Reserve Board, whether synchronous participation.

實際的情況,我相信,將會視乎當時的危機風險,會不會導致:大型的國際性銀行倒閉。我的論述重點是:投資市場,似乎正在醞釀新一波,類似 QE1及 QE2後續的「通脹式」上升趨勢。

The actual situation, I believe, will depend on the risk of crisis, will result in: a large international bank failure. The exposition will focus on: the investment market seems to be brewing a new wave of similar QE1 and QE2 subsequent inflation type upward trend.

5 標準普爾降低34間意大利銀行信貸評級:

5 Standard & Poor’s credit rating reduced by 34 Italian banks:


Standard & Poor’s since last month to reduce Italy’s sovereign rating levels.

10-02-2012 標準普爾:決定降低意大利34家銀行的信貸評級,其中包括義大利最大銀行,裕信銀行,評級更被連續降兩級,由A級降低至BBB+級,評級展望為負面。

10-02-2012 Standard & Poor’s: decision to lower the credit rating of the 34 banks in Italy, including Italy’s largest bank, Unit Creditor Italian bank, the rating was a continuous drop two lower A-level to BBB + level, the rating outlook is negative.
As the Italian government, numerous debts increase the difficulty of the local banking sector, loans to financial markets.

6 標準普爾,下調歐洲國家信貸評級,實際上會提高EFSF的融資成本:

Standard & Poor’s lowered the European countries credit rating will actually improve EFSF financing costs:


Credit rating lowered, it will seriously increase the euro zone sovereign debt crisis of individual countries continue to deteriorate.


France and other euro-zone countries sovereign credit rating, the rating agencies down grade, will certainly be seriously weakened, the European Financial Stability Fund loan effectiveness, especially the European Financial Stability Fund, adhere to the circumstances to maintain its AAA rating. The ratings go down, will not be conducive to expanding the sources of fund-raising.


A European Central Bank officials said that the French AAA sovereign credit rating, the rating companies lowered one level, will lead to the rescue EFSF into the strength of the state of the debt crisis, declined by about 20%, equal to the decline from 440 billion euros to 360 billion euros.


European Central Bank officials and economists pointed out that: including the rating of the sovereign credit rating of AAA, Austria and other countries, Standard & Poor’s lowered; it will further weaken the EFSF the ability to issue top-rated bonds.


In addition, some euro area countries rating was down will increase the EFSF the cost of financing. Solution: only allow the EFSF issue rated below AAA bonds, therefore, the guarantee amount, can ensure that the issuer of more low-grade bonds, the EFSF rescue forces immediately improved.


EFSF negotiations, the European Central Bank officials said, in fact, the € 444 billion rescue force is not enough.


However, the official said: Although the EFSF rating of AAA, has released about 20 billion euros top-rated bonds, their AAA ratings, there may appear to change.


France and other euro area countries credit rating, the rating agency lowered grades, could prompt the euro zone leaders decided to allow established in May 2010 for the rescue of Portugal and Ireland, the EFSF issuance of bonds rated below AAA. Some officials believe that this initiative, in fact, help to improve the EFSF’s lending functions.


European Central Bank officials believe that the EFSF’s AAA rating, the representative of the entire euro zone, is only part of the euro area.


The leaders of the euro area may Summit held in March, the total size of 500 billion euros of the EFSF and completed in July, permanent European Stability Mechanism (ESM).


Under the existing provisions of the agreement, the combined lending capacity of the EFSF and ESM, not more than 500 billion euros, the euro zone leaders will be in March 2012 of the Summit, to renegotiate the details.

The euro zone leaders to ignore the opposition of Germany, for the combined lending capacity, a maximum credit limit.


EFSF’s lending capacity based on the euro-zone government guarantees. 17 countries involved in the mechanism, only six of the country’s sovereign credit rating is AAA, therefore, all the European member countries need to provide more guarantees amount to maintain the AAA rating of the EFSF.


Currently, all member countries, the total committed capital of € 780 billion. However, countries with AAA ratings have been reduced from six to four, the rating of the remaining 11 countries, but also face varying degrees of changes.


The three global rating agencies, said: built on the only four countries (Netherlands, Germany, Finland and Luxembourg) is still an AAA country rating criteria, as the assessment EFSF, there will be a great difficulty, unless they increase more secured.

7 EFSF對被評級機構下調評級的回應:標準普爾降級不影響EFSF貸款的能力:

7 the EFSF response to downgrades by rating agencies: Standard & Poor’s downgrade does not affect the ability of the EFSF loans:


According to the Dow Jones news agency, the CEO of the European Financial Stability Fund (EFSF) Klaus Regaling said: January 16, 2012 Standard & Poor’s Ratings Services lowered EFSF rating level down from AAA to AA + level, does not affect the EFSF’s lending capacity.


Regaling said in an emailed statement: “Standard & Poor’s, the EFSF rating down one, to AA +, this initiative will not affect the EFSF 440 billion euro lending capacity. He said that based on current plans, as well as possible future adjustments made plans before the European stability mechanism (ESM) is put into operation in July 2012, the EFSF completely have the ability to promise.


The statement added: Standard & Poor’s EFSF the short-term rating, still the highest A-1 + level; at the same time, Standard & Poor’s two international peer partners – Moody’s Investors Service and Fitch Ratings – give the EFSF long-term and short-term credit rating is still the highest level.


January 13, 2012, Standard & Poor’s first cut in France and Austria, “AAA" credit rating, and also lowered the credit rating of the other seven countries, including Italy.


EFSF long-term credit rating from “AAA" by Standard & Poor’s, February 16, 2012 cut to “AA +", large-scale cut its credit rating of the euro area member states on the 13th of the agency after this move, had been expected being.

8 歐洲中央銀行,願意幫助希臘主權債券,置換為EFSF債券:

8 European Central Bank is willing to help the Greek sovereign bonds, the replacement for the EFSF bonds:


The European Central Bank agreed to a price below par value, of Greek government bonds held by the European Central Bank, the exchange of bonds issued by the European Financial Stability Fund (EFSF).The premise is: Greece, with private creditors, the impairment on the issue of Greek government bonds, must be to achieve results.


The Wall Street Journal, citing sources, said the EFSF to issue bonds, to the European Central Bank will actually be paid by the Greek.


In other words, the European Central Bank is indirectly accepted the impairment of the Greek government bonds, but also switch to low-risk bonds.


Through this program, Greece’s debt burden will be reduced to about 11 billion euros. European Central Bank, to buy bonds in the secondary bond market, bond prices, is already lower than the nominal price of the European Central Bank in this transaction, will not suffer losses.


The analysts believe that these initiatives contribute to the Greek political party leaders, to reach a debt agreement with private creditors.
The report also pointed out that the European Central Bank is willing to lower than the nominal prices, the exchange of Greek government bonds, these Greek government bonds in 2011, in the secondary bond market, spend about 40 billion euros to acquire.


European Central Bank, in 2011, re-start, the purchase of the bond program, buying the bonds of countries including Italy, Spain, into a debt crisis.


European Central Bank has refused for its holdings of Greek government bonds impairment, now re-buy into a debt crisis of the national debt, purely in order to save the market aberration. European Central Bank, said: This is to avoid the operational efficiency of monetary policy, not to save the individual countries.

9 這是一句中國的成語:「長貧難顧」:

9 This is a Chinese saying :To help the long-term poverty is very difficult.


February 9, 2012, the European Central Bank Governor Mario Draught said:


Recently adopted by the European Central Bank monetary policy, has made the prospects for the euro zone economy to get some improvement. Concern of financial markets, the central bank, will take part in the rescue of Greece, Mario Draught cannot answer.


Mario Draught: the economic prospects of the euro area, facing a high degree of uncertainty and downside risks, commodity prices, global economic outlook and protectionism interrelated. The overall pace of monetary expansion is still limited. At the same time, global growth in demand pressure, the debt situation in the European Union, to suppress the overall global economic momentum.


Mario Draught also pointed out that the central bank’s monetary policy measures to boost financial market pressures have eased, the economy; there have been signs of stabilization of short-term.


Although the fourth quarter of 2011, real economic growth will be very weak. However, it is expected that in 2012, the economy will gradually recover. The European Central Bank’s long-term refinancing operations, with an outstanding contribution. We see that the economic data seems to show: that the economy has stabilized.


Mario Draught further said: The three-year period after the start, the first quarter, the bank funding pressures have been eased; expected the second round, three-year period, refinancing operation: get a good demand, the scale should be similar to the first round. However, Mario Draught also repeated, in view of the previous policy statement: that the European Central Bank, non-standard measures, only a temporary conduct it.


On the issue of government debt of Greece, Mario Draught said, for Greece, the most important are: the government and the people, to reach an agreement to tighten policy, financial reform in Greece, should be top priority. In addition, he also expects that the Greek government and the private sector bond negotiations, agreement can be reached.


Drudge in the market talking about widespread concern: the European Central Bank, whether held by the Greek debt write-downs, president Mario Draught the one hand, pointed out: the European Central Bank, and absolutely not to incur losses; the other hand, it implies the sale of the profits of the Greek bonds, through the European financial stabilization mechanism indirectly transferred to Greece.


Mario Draught said: Greece is a special case of the European Central Bank is no arrangement for the second plan, for dealing with the debt problems of Greece, he was very convinced: all the arrangements, will find their own place., However, is still not clear that: the European Central Bank to deal with the debt problems of Greece, the actual What counter-measures.


Mario Draught on this a disguised form of funded initiatives in Greece, the rhetoric is very cautious, he pointed out: the European Central Bank, due to the terms of reference, can not violate the regulations, direct funding assistance to Greece.
However, the profits of the sale of the bond proceeds distributed to member countries, member countries have the right to use as they see fit, dispose of them, and access to distributable profits. Mario Draught further added: the EFSF in fact, can also be regarded as one of the member countries.


Mario Draught implication, very conscious, in other words, the European Central Bank, will be sold from the profits of Greek government bonds, assigned to the EFSF, then, the EFSF will be able to distributable profits from, in some particular way, be transferred to the Greek government, reducing the debt burden of the Greek government.


In fact, as long as the reader to further think about the current financial situation in Europe: Europe’s financial predicament, not the Greek government take the initiative to demand relief.
The actual situation is: the euro zone, the euro zone big brother, under the premise of the overall situation, they believe that the front of “a distressed brother” had to save it.
The reader should understand: the debt crisis in Greece and Europe, not in a short period of time, solving the problems.


We should understand that: before the European debt outlook remains uncertain, the European currency, is only suitable for selling, is not appropriate in the long-term holding, use a small amount of funding to follow the news hype, but bear in mind that the use of analytical tools, such as: the golden ratio. When encountered irrational market mutation, the stop-loss out of the market, bear in mind the preservation of strength.


In fact, readers are worth noting: the Greek government will be how to implement the program, is the crux of the problem. Greece, the country, protests, continues to heat up, this past weekend, has six Cabinet officials are not satisfied with the contents of the austerity program, they feel anger and resignation, which fully reflects the governance of the Greek government officials, the concept of the rule, like disunity.


Although the Greek government should be able to smoothly get a loan of 1,300 million euros. But in the short run, Greece still has a lot of potential financial risks. The first aspect: the Greek government and the private sector creditors, wrestling, still unable to the outcome. Private sector creditors can choose to refuse to accept, the Greek government for debt agreement, while taking CDS compensation.


The second aspect: the protests of the Greek people, almost choked the country’s economic power, the current leader of the Greek government has been helpless. Leaders, how to do? How to do will be successful?


Finally, all my dear readers, allow me to once again use a Chinese proverb, as the end of the current discourse.

“Two thousand dollars of savings, spent two dollars a day, if there is no source of income, of $ 2,000 is available on how many days?”

10 筆者,進入外匯市場,進行投機買賣的理據:

10 The author, enter the foreign exchange market, the rationale for the speculation:
The reader, if the ideas and the same author’s, and may wish to consider: Australian dollar against the Japanese currency as a carry trade: one of the options.


14-02-2012 Japan’s central bank announced: to keep the benchmark interest rate at 0 to 0.1%. However, unexpectedly, the additional purchase of asset size: U.S. $ 128 billion, and at the same time set the inflation target of 1%.


Readers should pay attention to are: Japan’s central bank initiatives; the Bank of England (BOE) to increase the size of the purchase of government bonds budget increased to $ 32.5 billion. Step into 2012, each national central bank, has a large number of printing money, was kicked off.


The various national central banks vie with each other in different forms, increase the money supply and liquidity of cash, the global economic situation, will certainly go through one more cash depreciation of the wave; commodity markets as well as the value of physical assets, a significant appreciation of the opportunity will be increase.


Volatility of financial markets, in the case of high wind and waves, the flow of funds, has become: the choice of investments, analysis of investment, one of the important lessons, readers must examine.


If so, if we look ahead to the next few years, finds that: global economic growth rate is still slow. However, each country’s central bank to continue to print money in the currency increasing during this period, the low interest rate currency and high interest rate currencies, the carry trade, will be one of the mainstream financial markets and investment.


Next Issue:

The Greek government accepted the loan and can really lead the Greek people, onto the happy days?


I really hope to have the opportunity to meet with Greek officials, presented to them, some superficial opinions.

筆者在本站網誌發表的所有內容,純屬個人意見分享,並未對任何人士構成投資建議 。

My blog published on this site all content is purely personal opinion to share, did not constitute investment advice for any person.