The Institute of International Finance (IIF) welcomes the decisions by the euro area finance ministers on November 29 to strengthen the European Financial Stability Facility.
The EFSF has thus been authorised to offer partial-risk protection of 20-30 per cent to a newly-issued bond of a Member State. On its funding side, the EFSF can now issue short-term bills and use government bonds it may have purchased on secondary markets for repo transactions.
Charles Dallara, managing director of the IIF, said: “These decisions have enhanced the capacity and flexibility of the EFSF to help euro area member countries which are putting in place measures to restore market confidence. They are important political and technical steps in the direction of deepening economic and fiscal integration in the euro area that would address the current sovereign debt problem.”
Press release
© IIF - Institute of International Finance
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