Thursday, October 11, 2012

European Central Bank ECB Bond Purchasing Considered Legal as OMT Outright Monetary Transactions Under Article 18.1 of the Statute of the European System of Central Banks

Bond purchases by the European Central Bank ECB are considered to be legal as Outright Monetary Transactions OMT under Article 18.1 of the Statute of the European System of Central Banks

Gabi Thesing has the story at Bloomberg Business Week in ECB Says OMT Is Legal as Necessary Tool in Special Times.

See also Jana Randow at Bloomberg on ECB Rejects IMF Call for Lower Rates Citing Broken Transmission [transmission of the ECB policy].

See The European Central Bank
  • general index
  • legal framework index
  • STATUTE OF THE EUROPEAN SYSTEM OF CENTRAL BANKS
    AND OF THE EUROPEAN CENTRAL BANK
    ,
    which provides inter alia:
    "CHAPTER IV
    MONETARY FUNCTIONS AND OPERATIONS OF THE ESCB

    Article 17

    Accounts with the ECB and the national central banks
    In order to conduct their operations, the ECB and the  national  central  banks  may  open  accounts  for  credit  institutions,  public
    entities and other market participants and accept assets, including book entry securities, as collateral.

    Article 18

    Open market and credit operations

    18.1.    In order to achieve the objectives of the ESCB and to carry out its tasks, the ECB and the national central banks may:
    —  operate  in the  financial  markets  by  buying  and  selling outright  (spot  and  forward)  or  under  repurchase  agreement  and  by lending or borrowing claims and marketable instruments, whether in Community or in non-Community currencies, as well as precious metals;
    —  conduct  credit  operations  with  credit  institutions  and  other  market  participants,  with  lending  being  based  on  adequate collateral.

    18.2.    The  ECB  shall  establish  general  principles  for  open  market  and  credit  operations  carried  out  by  itself  or  the  national
    central banks, including for the announcement of conditions under which they stand ready to enter into such transactions."
    [emphasis added by LawPundit]


Software Patents? Who Needs Them? asks Judge Richard Posner

Judge Richard Posner is the most cited jurist of the modern era. Eric Savitz has the story of his opinion on software patents at Forbes in Judge Posner: Maybe There's No Reason For Software Patents.

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