Quantitative easing in the euro zone: Better late than never

Posted: January 23, 2015 in economy
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Quantitative easing in the euro zone


The policy will help, but less so than in other big economies

AFTER months of debate, having exhausted all the alternatives, the European Central Bank (ECB) announced on January 22nd that it was finally introducing a big programme of quantitative easing. It plans to spend €60 billion ($70 billion) a month for at least 19 months, adding hefty purchases of government bonds to an existing scheme to buy covered bonds and asset-backed securities (currently around €10 billion-worth a month). Special rules will apply to purchases of the bonds of countries like Greece which have received bail-outs. The bulk of any losses on sovereign debt that has been purchased will be borne by national central banks.
QE—creating money to buy financial assets including sovereign bonds—was first used by the Bank of Japan in the early part of the 2000s; the Federal Reserve and the Bank of England introduced it in the wake of the financial crisis of 2008. Long-standing …

via Economic Crisis http://ift.tt/1y2RcXi


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