Federal Reserve Bank of New York President William C. Dudley said the European Central Bank is providing a backstop to the continent’s banks.
The ECB “is being actually quite aggressive in being a lender of last resort to the European banking system,” Dudley, 58, said at a hearing of a House Oversight and Government Reform subcommittee in Washington. He pointed to the ECB’s three-year lending facility and its broadening of eligible collateral.
“Some people are arguing” the ECB should buy bonds directly from governments, which is “prohibited by treaty,” Dudley said.
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