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ECB launches bond-buying programme

Thursday, January 22, 2015 - 04:52

The European Central Bank has taken the ultimate policy leap, launching a government bond-buying programme which will pump hundreds of billions of new money into a sagging euro zone economy. (ROUGH CUT ONLY - NO REPORTER NARRATION)

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(ROUGH CUT ONLY - NO REPORTER NARRATION) The ECB said it would buy government bonds from this March until the end of September 2016 despite opposition from Germany's Bundesbank and concerns in Berlin that it could allow spendthrift countries to slacken economic reforms. Together with existing schemes to buy private debt and funnel hundreds of billions of euros in cheap loans to banks, the new quantitative easing programme will pump 60 billion euros a month into the economy, ECB President Mario Draghi said. By September next year, more than 1 trillion euros will have been created. Bonds will be bought on the secondary market in proportion to the ECB's capital key, meaning the largest economies from Germany down will see more of their debt purchased by the ECB than smaller peers. The prospect of dramatic ECB action had already prompted the Swiss central bank to abandon its cap on the franc while Denmark, whose currency is pegged to the euro, was forced to cut interest rates in anticipation of the flood of money.

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ECB launches bond-buying programme

Thursday, January 22, 2015 - 04:52