Tags: Pimco | El-Erian | Europe

Pimco’s El-Erian: Monetary Policy Alone Won't Save Europe

Monday, 21 Nov 2011 08:02 AM

The European Central Bank should not intervene in markets without greater reassurance from member nations that policy makers are committed to reform, says Mohamed El-Erian, co-head of Pimco, the world's largest bond fund.

Some European governments want the European Central Bank to ease monetary policy to help alleviate the crisis, while Central Bank officials say governments should work through a stability fund to prop up ailing economies like those in Greece and Italy.

Markets are getting even more anxious.
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"In the absence of proper policy responses, the dislocations have decisively breached the Italian firewall and have now spread to the core of the eurozone. The result is an across-the-board disposal of assets on the part of increasingly-stressed institutions," El-Erian writes in a CNBC guest blog.

Mohamed-El-Erian-224x300.jpg
Mohamed El-Erian
(Pimco file photo)
"For this reason alone, and whether we like it or not, we must all now be avid watchers of the ECB and of the range of required actions by other Europeans to enable this institution to be more engaged in solving the crisis."

European Central Bank President Mario Draghi has said monetary authorities will focus on keeping inflation rates in comfort zones, urging governments to tap rescue funds to end the crisis

"Where is the implementation of these long-standing decisions?" Draghi asks in a speech to the European Banking Congress in Frankfurt, Reuters reports.

"We should not be waiting any longer," he added in the text of his speech, although he did not actually say that line, Reuters reports.

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The European Central Bank should not intervene in markets without greater reassurance from member nations that policy makers are committed to reform, says Mohamed El-Erian, co-head of Pimco, the world's largest bond fund. Some European governments want the European Central...
Pimco,El-Erian,Europe
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2011-02-21
Monday, 21 Nov 2011 08:02 AM
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