Could same Q be asked about Irish Debt/bonds? "ECB made €7.8bn profits from Greek bond holdings"

robut

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Could same Q be asked about Irish Debt/bonds? "ECB made €7.8bn profits from Greek bond holdings"

ECB made €7.8bn profits from Greek bond holdings

The European Central Bank has made nearly €8bn in profits from its holdings of Greek government debt.

In a written response to a request from a Greek MEP, the ECB said holdings of Greek sovereign bonds acquired under its Securities and Markets bond-buying programme (SMP) had resulted in €7.8bn of net income interest between 2012-2016. These profits – as with others made from national bond holdings – are then redistributed to across all 19-country central banks in the eurozone.
Apologies for my ignorance if wrong, its why I ask here.

Could this apply to Irish Bailout debt also?

Could a headline be - "ECB made €xxbn profits from IRISH bond holdings" if the Q was asked?

Or am i way off the mark / this doesnt apply to Ireland?


( To read an FT article behind wall just copy headline - ECB made €7.8bn profits from Greek bond holdings - into google and click on 1st search result. Dont know why it works :D )
 


Disillusioned democrat

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The pesky Greeks wanting to know....I suspect no self-respecting Irish MEP would be bothered asking that kind of question, especially after the hard time Barossa gave Higgins when he dared to suggest Europe should have done more for us.

[video=youtube;uah_BVTmHeM]https://www.youtube.com/watch?v=uah_BVTmHeM[/video]
 

randomwalk

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I don't see the issue here. It's not unexpected that if you buy a debt with a positive YTM, and it doesn't default, that you are going to make some kind of profit, particularly when the yield on say Greek Debt has more or less halved since QE started
 

Disillusioned democrat

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I don't see the issue here. It's not unexpected that if you buy a debt with a positive YTM, and it doesn't default, that you are going to make some kind of profit, particularly when the yield on say Greek Debt has more or less halved since QE started
To me it looks like a bit of a con job.

In Ireland's case European banks lent to Irish banks without worrying about the risk, the ECB swooped in with a gun to our heads to make us borrow to pay off the banks bad debts and then, lo and behold, the ECB ALSO makes money out of it...kinda feels like the citizens of Europe are secondary to the elites plans
 

SPN

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To me it looks like a bit of a con job.

In Ireland's case European banks lent to Irish banks without worrying about the risk, the ECB swooped in with a gun to our heads to make us borrow to pay off the banks bad debts and then, lo and behold, the ECB ALSO makes money out of it...kinda feels like the citizens of Europe are secondary to the elites plans
How many times does this have to be explained to you?

European, and other, financial instutions loaned money to lrish financial institutions.

When the time came to roll over these loans the ECB was the only lender prepared to lend to the lrish financial institutions. The ECB loaned them around €150 Billion. The lrish financial instutions paid back the ECB over the following years as their customers repaid their loans which had been funded with this borrowedmoney.

Seperately, the lrish Government borrowed €65 Billion from the Troika to fund massive overspending by the Government on day-to-day stuff.
 

randomwalk

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To me it looks like a bit of a con job.

In Ireland's case European banks lent to Irish banks without worrying about the risk, the ECB swooped in with a gun to our heads to make us borrow to pay off the banks bad debts and then, lo and behold, the ECB ALSO makes money out of it...kinda feels like the citizens of Europe are secondary to the elites plans
This article refers to debt bought during asset purchase programmes, such as QE and its predecessors. They are buying debt on the secondary market, and are taking the price, which in this case is a reward for the fact that Greek Debt is highly risky. They are also depressing yields, which is of huge benefit to both Greece and Ireland in financing borrowing leading to huge savings. If it makes you feel better, as far as I know, QE is expected by many to produce a loss for central banks.

Furthermore, as far as I can tell from this article the programme for Irish bonds is loss making.

https://www.rte.ie/news/business/2017/0726/893099-central-bank-sets-aside-165m-to-deal-with-potential-lo/
 

HarshBuzz

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To me it looks like a bit of a con job.

In Ireland's case European banks lent to Irish banks without worrying about the risk, the ECB swooped in with a gun to our heads to make us borrow to pay off the banks bad debts and then, lo and behold, the ECB ALSO makes money out of it...kinda feels like the citizens of Europe are secondary to the elites plans
Would you prefer if we hadn't been bailed out?

Also, as razorblade points out, the ECB undertook the same market risk as anyone else brave enough to buy Greek bonds.
 

HarshBuzz

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This article refers to debt bought during asset purchase programmes, such as QE and its predecessors. They are buying debt on the secondary market, and are taking the price, which in this case is a reward for the fact that Greek Debt is highly risky. They are also depressing yields, which is of huge benefit to both Greece and Ireland in financing borrowing leading to huge savings. If it makes you feel better, as far as I know, QE is expected by many to produce a loss for central banks.

Furthermore, as far as I can tell from this article the programme for Irish bonds is loss making.

https://www.rte.ie/news/business/2017/0726/893099-central-bank-sets-aside-165m-to-deal-with-potential-lo/
That's a rare RTE article that makes sense. Good read and explains the issues well.
 

gleeful

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I imagine the ECB made vastly larger profits on Italian debt, given its greater size. And give that Greece is a shareholder in the ECB, Greece benefits from that profit along with the profit made fron Greek debt.
 


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