Following the results of Europe’s bank stress tests, there are growing calls for the European Central bank (ECB) to start buying sovereign bonds in an effort to stump up the region’s flagging recovery.
The ECB has already launched a host of stimulus measures to reverse growth-sapping disinflation, including cutting interest rates to record lows and announcing plans to purchase covered bonds and asset-backed securities (ABS).
Many economists have warned this is not enough, however, with former ECB Governing Council member Athanasios Orphanides telling CNBC that the central bank “should have already started” buying sovereign bonds—or full-blown quantitative easing (QE).
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.