ECB bond purchases won’t be enough to reach €1Tr expansion

central banks balance sheet

“I can understand it when markets significantly underestimate the value of the bonds… but I can’t understand it now. Frankly, there is a loop between central banks and markets and, when one of them moves, it will feed the decisions of the other –this is madness. I hope I’m wrong,” Vigil says.

Not everything is bad news, though. Barclays’ analysts point to the positive effect that the drop in oil prices will have on the economy. It will be more pronounced and have a mor epositive effect on the US than on Europe, where high oil prices are due to the 80% tax on the final price. However, for Europe, the Euro falling below the Dollar would have an even more positive effect: while a 10% fall in oil price has a negligible impact on  GDP, a 10% fall in the Euro leads to a 0.5% growth in one year.

About the Author

The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.

Be the first to comment on "ECB bond purchases won’t be enough to reach €1Tr expansion"

Leave a comment