ABS buying gets compared to QE elsewhere because it means the central bank is buying assets to hold on its balance sheet but in reality it’s different because the aims and market is different. Nowotny was the first ECB policymaker to speak about it when he said ABS program is primarily a long-term structural measure.
The Fed bought Treasuries in order to drive rates lower in a move that would make it more attractive for everyone to take on debt.
The ECB isn’t buying ABS to drive down rates. What they’re aiming to do is create/stimulate the market for ABS. There isn’t a big enough market for the ECB to intervene and drive down rates so the level of ‘printing’ will probably never reach the Fed’s rate.
Eventually, by creating a market for asset-backed securities, the ECB’s actions could be much more stimulative for the economy and much less of a drag on the currency. But that’s only if the plan works.
