Thursday, February 21, 2013

Eurosystem Seniority in OMT?

At the announcement of the ECB's "Outright Monetary Trasanctions" (OMT) in September an accompanying press release stated that any purchases by the eurosystem would not be senior to private creditors:

Creditor treatment
The Eurosystem intends to clarify in the legal act concerning Outright Monetary Transactions that it accepts the same (pari passu) treatment as private or other creditors with respect to bonds issued by euro area countries and purchased by the Eurosystem through Outright Monetary Transactions, in accordance with the terms of such bonds.

As of yet, there has been no clarification.  

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