Banking | Europe
In the cantankerous world of European public finance, the decision to choose what institutions’ bonds are eligible for inclusion as collateral under quantitative easing (QE) by the European Central Bank did not go without dissent. Italy represents the third-largest euro economy, and it has €2.3 trillion ($2.4 trillion) of government bonds currently outstanding. But no Italian banks made the cut. Most notable was the exclusion of those issued by the Cassa Depositi and Prestiti, a financial organization under public control.
In its first round of QE, the ECB said that the bonds of only seven European financial institutions were eligible—until further revision, which won’t happen until at least April 15. Eligible firms include two French institutions—Caisse d’amortissement de la dette sociale (CADES) and Union Nationale Interprofessionnelle pour l’Emploi dans l’industrie et le Commerce (UNEDIC); a Spanish one—Instituto de Crédito Oficial; and four German banks—KfW, L-Bank, Landwirtschaftliche Rentenbank and NRW.BANK.