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” The ECB should try to surprise the markets “.: Look at the new building of the ECB in Frankfurt (14 January 2015)
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ECB President Mario Draghi seems determined on the first monetary policy meeting of central bankers this year, the floodgates very much to open and provide more liquidity to the banks
In preparation is a broad-based buying of euro government bonds -. in the jargon “quantitative easing” (QE) called. Although the German Federal Bank continues to reject such unconventional step, Draghi should now have a majority in the Governing Council safely.
The highly anticipated ECB Decision has already caused turmoil. By the prospect of bond purchases, the euro has continued to lose value. So he pressed again lately to the lower limit of the SNB, which the National Bank now dropped
On the stock market the recent cash injection the ECB is now considered a foregone conclusion -. However, correspondingly high is the risk should Draghi decide otherwise. “But for the sake of credibility QE seems unavoidable”, said the economists of the major bank UniCredit.
Also, Helaba analyst Ulrich Wortberg firmly expects that the ECB will deliver. “The question now is how the details and the volume will be.” UniCredit experts expect at least 500 billion euros of government bonds and up to an additional $ 250 billion for corporate bonds and other securities.
deflation prevent
Draghi calculus behind this ultra-loose monetary policy along the lines of the US: Next falling bond yields should banks get them to re-invest in riskier products and to provide some more loans available , The current sluggish economy in the euro zone would be boosted by – and rising inflation again
The risk of Abwärtssogs from falling prices, weak consumption and declining investment could be averted.. In the euro zone, the cost of living had fallen by 0.2 percent in December for the first time in more than five years.
According to the Berlin economists Marcel Fratzscher Draghi should go right into the full. “The ECB should try to surprise the markets and rather than going immediately to the thousand billion euros,” said the head of the German Institute for Economic Research (DIW) to Reuters. The total amount to around 10 per cent of government bonds in the euro zone, says the economist.
struggle for Details
About the details of the program will still violently wrestled under the Euro-central bankers. So it must be clarified whether all government bonds purchased by the ECB or if the central banks of the euro countries should acquire at your own risk item.
The question which papers are to be bought and what credit they have may need to be answered, as well as a possible upper limit. One option would be going to acquire according to the size and economic power of the countries Bonds.
Because many technical things still need to be clarified, Draghi could only present a decision in principle, according to experts on Thursday if possible. The details would be worked out until the next Council meeting on March 5 in Cyprus.
The German Bundesbank is critical QE has long been compared to. She fears that there is a redistribution of the risks of taxpayers. In addition, Bundesbank President Jens Weidmann criticized that comprehensive government bond purchases for highly indebted countries could be understood as a hedge against a possible bankruptcy. The zeal for reform in the countries would then braked. (sda)
Created: 18/01/2015, 22:14 clock
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