ECB launches expanded asset purchase program – Will buy €60bn per month

Author: Ryan Littlestone | Category: Central Banks

Details of the January 2015 ECB governing council monetary policy meeting 22 January 2015

  • Purchases to compliment previous programs
  • ECB will by €60bn per month of assets until end of September 2016
  • Will buy government bonds in secondary market in March
  • Will buy until ECB sees sustained inflation im
  • provement
  • Changes TLTRO pricing to equal MRO rate
  • Removes 10bp spread on TLTRO for future
  • Council regains control over program features
  • Agency debt will be subject to loss sharing
  • Will coordinate purchases and will implement program decentrally
  • Agency debt will be 12% of additional purchases
  • Rest of purchases won’t be risk shared, ECB will hold 8% of additional asset purchases
  • ECB decision reflects adverse developments
  • Potential for second round effects have increased
  • Market based inflation expectation measures worsened
  • Economic slack still sizeable
  • Money and credit to remain subdued
  • Action needed to  achieve inflation target
  • Action will underpin inflation expectations
  • Measures will ease policy stance further
  • Sees increasing differences in policy cycles globally
  • Decisions should help push inflation higher
  • Oil prices have strengthened economic potential
  • Downside risks should have diminished now
  • Inflation seen very low and negative in coming months and is unavoidable
  • Sees inflation gradually rising later in 2015 & 2016
  • Council will monitor price risks closely
  • Will watch impact of FX developments on prices
  • Decisive action needed from other policy areas
  • Calls for decisive productivity and labour market reforms
  • Fiscal policies should support economic recovery
  • Lending to companies remains weak

On to Q&A. The ECB feed is kaput my end.

For anyone else who’s lost it Bloombergs “live event” feed is running online

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