Mario Draghi’s plan to stimulate Europe’s economy by buying asset-backed securities is underwhelming investors, with purchases bogged down by bureaucracy and paperwork.
Since the European Central Bank president started the program eight weeks ago, 2.12 billion euros ($2.46 billion) of debt has been acquired. At this pace it will take almost eight years to reach even one tenth of his 1 trillion-euro target for balance sheet expansion.
The reason for the slow progress is that it takes as long as five days for ECB officials to approve purchases and asset managers hired to buy the debt are required to compile lengthy documents detailing the investment case for each bond. It’s fueling speculation Draghi will initiate a quantitative easing program buying government bonds when the bank’s Governing Council meets on Thursday in Frankfurt.
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