I think we all know what the ECB should do today – cut rates 50bps and bring in QE to take the peripherals sovereign debt off bank balance sheets. What they WILL do however is an entirely different question.
One suspects we will see some liquidity measures; re-institute the 12 month window but the ECB has a bad habit of “underwhelming” the market. Axel Weber obviously has a lot of power and his little rant a fortnight ago about French banks swapping Greek debt for something a little better gives me no confidence that they will act decisively.
Let’s hope Axel is on holidays or off sick today!