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Soros Calls for ECB to Stop the Bond Run

Billionaire investor George Soros believes the euro zone bond market is facing a similar situation to the banking system in 2008 and wants the European Central Bank to step in to stop a self-fulfilling crisis of confidence. (Well Hell... if Soros says...)

George Soros
George Soros

“As regulators still treat government bonds as the safe core of the financial system, this vicious circle threatens the stability of financial institutions, not only in the euro zone but also in the rest of the world,” Soros, the chairman of Soros Fund Management, said in a co-written article with Peter Bofinger of Würzburg University in Tuesday’s Financial Times.

Without action, Soros believes recessionary pressures will intensify making the situation in the bond market worse.

“It’s a perfect vicious circle,” he wrote in the article.

With Germany and Chancellor Angela Merkel unwilling to accept a joint euro zone Eurobond and the European Financial Stability Fund [cnbc explains] not being seen by the market as a credible mechanism for shoring up confidence in the bond market, Soros believes the ECB is the only institution that can solve the crisis.

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