May 30 (Bloomberg) -- Luke Spajic, the head of European credit portfolio management at Pacific Investment Management Co., said the European Central Bank is “the only game in town” to help the continent.
“The ECB has to step in,” Spajic said on Bloomberg Television’s “The Pulse” with Caroline Hyde. The Frankfurt-based bank’s second Longer-Term Refinancing Operation “really took the market by surprise” and helped banks, he said.
Spajic said he would “love” to see closer fiscal integration in the euro area. A bank deposit guarantee program would be difficult because “it may take a legislative change” involving the agreement of all 17 euro-area members, he said.
Credit investors should avoid risky euro-region corporate bonds, Spajic said. Emerging markets are “the future,” though they’ll also be contaminated by the European crisis, he said. U.S. Treasuries remain the “true safe haven,” according to Spajic.
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