Saturday 7 January 2012

European Financial Stability Facility

European Financial Stability Facility (EFSF) is an organisation set up in 2010 to help solve Europe's Sovereign Debt crisis.

Headquarters: Luxembourg    CEO: Klaus Regling

- EFSF works like a bank to provide loans to eurozone members who have economic difficulties.

- EFSF receives administrative help from European Investment Bank

- EFSF issues bonds or other debt instruments to provide loans to countries that need them. These loans are 'guaranteed' by other states in eurozone.

- In certain circumstances, EFSF also allows a country to use the loans to support one of its bank deemed to be in financial trouble.

- EFSF can also intervene in debt primary and secondary markets. Secondary market intervention is only after European Central Bank recognition of exceptional financial circumstances.

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