Eurozone Crisis (Tornell & Westerman)

Eurozone crisis, Act two: Has the Bundesbank reached its limit? by Aaron Tornell and Frank Westermann published by VOX. “The ominous sing – which might set stage for Act two in the unfolding Eurozone drama – is the fact that the Bundesbank will soon exhaust the stock of securities that it can sell to fund further loans to the Eurosystem. At that point, the Bundesbank could sell its gold or increase the deposits it takes from the private sector. Most likely, however, the Bundesbank will face strong pressure from the German public against such action. Hence, it appears as if the Eurozone crisis is entering a second phase in which policymakers feel the need for new measures to  prevent market turmoil.”