Sources Say ECB Has 500 Billion EUR QE Program

The European Central Bank (ECB) has discussed a 500-billion-euro ($593 billion) quantitative easing program, a source at the central bank told CNBC.

No decision has been taken, but the program would involve purchasing countries’ investment-grade-rated sovereign debt—bonds with a rating of BBB-/Baa3 or higher.

Bloomberg first reported the news, following a global market rally on Thursday after ECB President Mario Draghi reiterated that the central bank was open to a sovereign bond-purchasing program.
Such a measure could potentially be announced at the ECB’s next policy meeting on January 22.

Purchasing only investment-grade, rather than speculative-grade, debt would minimize the amount of risk the ECB or euro zone central banks take onto their balance sheets. It would exclude Greek and Cypriot sovereign bonds, both of which are “junk” grade.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza