Risk Europe : ECB board member warns central banks against over-reaching on risk

"Central banks have no comparative advantage in credit risk management," said Gonzalez-Paramo. "Consequently, central banks should not take on credit risk unless there are good reason for doing so in terms of providing necessary liquidity services, or it is required in order to re-establish an effective transmission mechanism for monetary policy."

ECB president Jean-Claude Trichet announced the central bank would be buying euro-denominated covered bonds in the primary and secondary markets

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