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In Europe 22nd January 2015

QE European style: €60bn monthly bond-buying until Sept 2016

MADRID | By Ana Fuentes | Amid huge market expectation, ECB’s president Mario Draghi unveiled THE operation aiming to spur growth in the eurozone: the European QE will consist of €1.1tn sovereign bonds purchases, or €60bn a month until September 2016, beginning in March. A crucial move in exchange for low risk sharing (only 20% of bonds purchased by ECB, 80% by national central banks; and Greek bonds are expected to remain out). The euro touched an intraday low of  1.1451 dollars.

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In Europe 22nd January 2015

“NCB risk bearing should be traded-off against a big QE”

MADRID | By Ana Fuentes | Hours before ECB’s president Mario Draghi unveils its big easing program, we spoke to think tank Bruegel central banks’ expert Silvia Merler about an eventual national risk bearing. It could be a way to make QE more acceptable by Germany, she believes, although “it should be traded-off against a significant size” (meaning more than the €50bn purchases per month some market watchers are talking about).

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In Europe 21st January 2015

Draghi’s deal

MADRID | By J.P. Marín Arrese | Mario Draghi has snatched green light for launching his coveted bond-buying scheme. In exchange, he has caved in to German pressure transferring the potential losses to the national banks. The ECB may seem to have lost its independence but striking such a deal was worth the price. 

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In Europe 3rd January 2015

Germany: Topsy-turvy world (I)

FRANKFURT | By Lidia Conde | The headlines on the German media would suggest that we live in a crazy world or on the edge looking into the abyss. The fear of a potential catastrophe due to the anti-crisis policy by Mario Draghi and Janet Yellen has led to many different theories and proposals.

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Markets 5th December 2014

Draghi in drag

SAO PAULO | By Marcus Nunes via Historinhas | The European Central Bank opened the door to a dramatic escalation in its campaign to stimulate the eurozone’s stagnant economy early next year, signaling a new chapter in the bank’s fight against excessively weak inflation in the heart of Europe. ECB President Mario Draghi said after the bank’s monthly meeting that officials discussed purchases of government bonds, known as quantitative easing or QE, but that they needed more time to gauge the effects of policies that they have already implemented while assessing how falling oil prices may affect the bank’s consumer-price outlook.

inflation in the eurozone

In Europe 27th November 2014

ECB: two quotes, one graph

MADRID | The Corner | Mario Draghi: “Some form of cross-country risk-sharing is essential to help reduce adjustment costs for those countries and prevent recessions from leaving deep and permanent scars.”/ Jens Weidmann: “Fiscal policy should support the central bank with solid state finances, so that monetary policy can concentrate on its actual mandate, and sustainably secure the value of money.”

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Markets 24th November 2014

Investors find it hard to trust the ECB…

MADRID | The Corner | It seems Mario Draghi is preparing the markets and the ECB’s Government Council for further action as soon as next December. Investors are reluctant to trust Mr Draghi’s words, but they seem to be more confident lately. However, this “affair” will come to an end if the ECB does not take effective measures. According to market watchers at Link Securities, markets will closely monitor the ECB’s Government Council meeting, which will be crucial for investors to maintain their trust in the European institution.

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Markets 21st November 2014

ECB to start ABS purchases

MADRID | The Corner | The European Central Bank published the legal act for purchases of asset-backed securities, setting it up to start buying the debt as soon as this Friday. Proponents say the measure “could boost the shaky eurozone recovery by reducing borrowing costs for businesses, households and governments.” According to market watchers at Link Securities, Mario Draghi will reiterate the intention of adopting new measures to boost the economic growth in the Eurozone.