Here’s wise old Stephen Lewis from Monument Securities:

“Mr Cameron and others are urging the ECB to buy government bonds.  Their idea is that the ECB should buy the bonds because nobody else is willing to hold them.  The ECB is exhorted to act as ‘lender of last resort’.  This sounds reasonable; the ‘lender of last resort’ role is one that a central bank is supposed to fill.  However, language is being misused here.  A central bank is lender of last resort to solvent financial institutions when, in a dysfunctional market, it supplies them with liquidity against the sound collateral they are able to provide.  ‘Lender of last resort’ responsibilities do not stretch to insolvent institutions.  Nor does it cover central bank lending to governments.  That is more usually called monetisation of the public debt.

“Mr Cameron can hardly go to Berlin and call on the ECB to monetise government debt, if only because this might lead markets to reassess the basis on which QE is being conducted in his own country.  Massive ECB buying of government bonds unwanted by private investors would be an obvious case of monetising the debt.  It would raise doubts whether there was any financial anchor at all for the euro arrangements. That, in turn, would probably precipitate an even more dangerous crisis than now faces policymakers.”

Nothing is ever simple, is it?