THE European Central Bank is considering requesting an increase in its capital to help cope with the rising costs of fighting the eurozone debt crisis, Reuters sources have said.The report continues,
ECB policymakers have repeatedly signalled that the central bank cannot bear the brunt of fire-fighting against bond market attacks on highly indebted euro zone states.
“The issue is that the ECB is worried about potential losses from its bond buying,” one source said.
“At the moment we are buying very modest amounts, but what if that is increased, and what if the bonds you buy are suddenly worth 30 per cent less?” the source said, referring to the risk of a writedown on a eurozone government’s debt.
The ECB declined to comment.Cannot say that I am surprised.