Memento: How QE will work

ECB's QE country breakdown
  • Purchases under the program will start on March 9.
  • Purchases will total €60 billion per month.
  • The ECB will purchase debt with negative yields, so long as those yields are not below the ECB deposit rate at time of purchase. The ECB deposit rate is currently -0.2%.
  • If a Euro-Area central bank cannot purchase sufficient marketable debt instruments to fulfill its allocation, the ECB will allow substitute purchases. This substitute purchases rule should enable the ECB to fill its €60 billion target each month.
  • The ECB will not buy more than 25% share of any one issue in order to avoid it having a blocking majority in case of any debt restructuring.
  • The ECB will only buy in the secondary market.
  • The ECB will purchase debt with remaining maturity between 2 and 30 years only.

The ECB provided a list of the international and supernational institutions and agencies it would purchase the debt of:

    • Council of Europe Development Bank
    • European Atomic Energy Community
    • European Financial Stability Facility
    • European Stability Mechanism
    • European Investment Bank
    • European Union
    • Nordic Investment Bank
    • Caisse d’amortissement de la dette sociale (CADES)
    • Union Nationale Interprofessionnelle pour l’Emploi dans l’Industrie et le Commerce (UNEDIC)
    • Instituto de Credito Oficial
    • Kreditanstalt fuer Wiederaufbau
    • Landeskreditbank Baden-Württemberg Foerderbank
    • Landwirtschaftliche Rentenbank
    • NRW.Bank

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 "Memento: How QE will work"

Leave a comment