Nicholas Spiro, Managing Director of Spiro Sovereign Strategy
Dr Nicholas Spiro is managing director of London-based Spiro Sovereign Strategy, a niche consultancy specialising in European sovereign credit. Dr Spiro advises private and institutional clients on the more qualitative and idiosyncratic determinants of sovereign risk, with a particular focus on southern Europe and emerging Europe.
European summits are no longer nerve-wracking affairs for financial markets. The signalling effect of the ECB’s bond-buying programme, dubbed Outright Monetary Transactions (OMT), has allayed market fears of a break-up of the eurozone and made investors less sensitive to the policymaking process in Europe’s single currency area.
The signalling effect of the ECB’s bond-buying programme, known as Outright Monetary Transactions (OMT), has lost none of its potency. But guest columnist Nicholas Spiro warns that it is not a panacea.
Just as bond investors didn’t need a rating agency to tell them that the US and France were no longer Triple A credits, the decision by Moody’s last Friday evening to strip the UK of its cherished gold-plated credit rating was neither surprising nor revealing.