Don Hanna: ECB Should Cap The Yield And Create Greater Confidence

Don Hanna, who manages the New York-based Fortress Investment Group, talks about his opinion on the European debt crisis and the ECB’s monetary policy during an interview on Bloomberg.

Overall Don said he didn’t think the ECB meeting actually solved the problem. He believes the situation in Europe is a question of providing finance, rather than doing fiscal adjustments. However, since the fiscal pact will take time to put in place, and the ECB deferred to provide financial assistance, the problem is still a fiscal problem which cannot be solved by the ECB.

Don said: “The ECB should be buying bonds.” But he also mentioned that reason why banks haven’t been raising money is linked to the difficulties of the concerns that the investors haven’t bought enough sovereign bonds. “Diminish those concerns will would be helpful with the ECB with acting as a buyer of the last resource of those bond” said Don, “Capping the yield and creating greater confidence in the market that the banks will have the adequate capital and the adequate liquidity to move forward.” (Check here to see the full interview)