ECB QE Could be Tied to Paid-in Capital Contributions

The European Central Bank (ECB) could be ready to announce a quantitative easing (QE) program based on the contributions made from national central banks, a source close to the central bank has told CNBC.

The source said that the central bank is planning to design a sovereign debt purchase program based on the paid-in capital contributions made by euro zone central banks.

Every national central bank pays a certain amount of capital into the ECB. For example Germany pays in 17.9 percent of the total contributions, while France contributes 14.2 percent. Cyrpus, meanwhile, pays the least with 0.15 percent of the total.

The level of this paid-in capital contribution would determine how much of that country’s sovereign debt the central bank would purchase, according to the source. However, the ECB’s plans for extraordinary measures have yet to be finalized.

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