ECB debated smaller stimulus package: accounts

ECB debated smaller stimulus package: accounts

©
Reuters.
FILE
PHOTO:
ECB
headquarters
in
Frankfurt

FRANKFURT
(Reuters)

European
Central
Bank
policymakers
debated
a
smaller
increase
in
emergency
bond
purchases
last
month
and
were
keen
to
emphasize
that
they
may
not
spend
the
full
quota,
the
accounts
of
their
Dec
10
meeting
showed
on
Thursday.

Facing
a
new
recession
amid
widespread
lockdowns,
the
ECB
approved
fresh
stimulus
measures
at
the
meeting,
hoping
to
keep
borrowing
costs
depressed
until
the
bloc
is
ready
to
reopen.

“It
was
argued
that
the
focus
on
preserving
favourable
financing
conditions
implied
a
move
away
from
a
constant
monthly
pace
of
purchases
towards
adjusting
the
pace
according
to
market
conditions,”
the
ECB
said.

“This
approach,
combined
with
forceful
communication,
could
allow
the
Governing
Council
to
reduce
the
pace
of
purchases
while
having
an
equivalent
effect
on
financing
conditions,”
policymakers
said,
according
the
accounts.

Restrictions
on
everyday
life
have
grown
increasingly
onerous
even
in
the
past
month
challenging
growth
assumptions
and
raising
the
risk
recovery
would
be
even
further
delayed.

But
ECB
President
Christine
Lagarde
this
week
argued
that
uncertainty
is
actually
declining
and
even
if
the
pandemic
presents
near
term
challenges,
the
overall
outlook
has
not
changed.

ECB
policymakers
began
discussions
ahead
of
the
December
meeting
with
a
proposed
750
billion
euros
worth
of
additional
bond
purchases
before
settling
for
half
a
trillion
euros
on
Thursday,
sources
told
Reuters
at
the
time.

“A
more
moderate
increase
in
the
PEPP
envelope
was
advocated
by
a
number
of
members
based
on
the
argument
that
significant
space
for
purchases
was
still
available
from
past
decisions
and
that
in
an
environment
of
high
uncertainty
it
was
worth
‘keeping
some
powder
dry’,”
the
ECB
added.

The
ECB
will
next
meet
on
Jan
21
and
policymakers
are
expected
to
reaffirm
the
bank’s
ultra
easy
policy,
including
1.85
trillion
euros
worth
of
bond
purchases
as
part
of
the
Pandemic
Emergency
Purchases
Programme
through
March
2022.


Disclaimer:


Fusion
Media

would
like
to
remind
you
that
the
data
contained
in
this
website
is
not
necessarily
real-time
nor
accurate.
All
CFDs
(stocks,
indexes,
futures)
and
Forex
prices
are
not
provided
by
exchanges
but
rather
by
market
makers,
and
so
prices
may
not
be
accurate
and
may
differ
from
the
actual
market
price,
meaning
prices
are
indicative
and
not
appropriate
for
trading
purposes.
Therefore
Fusion
Media
doesn`t
bear
any
responsibility
for
any
trading
losses
you
might
incur
as
a
result
of
using
this
data.


Fusion
Media

or
anyone
involved
with
Fusion
Media
will
not
accept
any
liability
for
loss
or
damage
as
a
result
of
reliance
on
the
information
including
data,
quotes,
charts
and
buy/sell
signals
contained
within
this
website.
Please
be
fully
informed
regarding
the
risks
and
costs
associated
with
trading
the
financial
markets,
it
is
one
of
the
riskiest
investment
forms
possible.

Category Latest Posts