Special focus: European Stability Mechanism (ESM)

ESM definition: The European stability mechanism (ESM)  is a proposed permanent rescue fund  intended to provide financial assistance  for eurozone members. The ESM plans to rescue Spanish banks and work with the ECB to contain market interest rates.The ESM would replace the European Financial Stability Facility (EFSF) and the European Financial Stabilisation Mechanism (EFSM).

Is the ESM the key to restarting bank lending?
The bestowal on the European Stability Mechanism of a banking licence with a mandate to buy up performing bank loans might prove the boost that eurozone economies desperately need. 

Cracks emerge in ECB's bond-buying plan
The European Central Bank's announcement of a bond buying programme on Thursday needs to address "convertibility risk" premia and fiscal conditionality, analysts say, amid fears over moral hazard.

Who does the EFSF answer to? 
There is a lack of clarity over the procedures that have to be followed to enable European Financial Stability Facility (EFSF) bond purchasing.

German bund 'structural rally' on track despite Moody’s action – analysts
German government bond yields are set to remain at historic lows, even after Moody's changed the sovereign outlook to negative, as collateral and liquidity demand offset the declining creditworthiness of core Europe, claims Nomura. The stakes for fixed-income investors in eurozone sovereign debt are rising.