ECB’s Coeure Says QE Will Work Due to Size

The European Central Bank decided to embark in a large program of asset purchases because of deteriorating expectations on inflation over a number of years, ECB Executive Board Member Benoit Coeure said on Thursday.

Speaking at an event here, Mr Coeure said he is confident the recently launched, so-called quantitative easing by the ECB will succeed. “It will work because it’s big,” he said.

But the central bank official reiterated  the ECB cannot do everything to fix the euro-zone’s sluggish economy. Governments have to do their part with structural reforms, a message some members of central bank’s board have stressed.

Mr. Coeure added that the ECB’s decision on the purchases was vindicated by general comments noting that “the ECB had done what it had to do,” according to its mandate. The ECB has a mandate to keep the euro-zone inflation rate close to, but below 2%.

The bank recently decided to buy 60 billion euros ($68 billion) of government bonds and other assets each month to inject liquidity in the euro-zone system and rekindle economic growth.

via WSJ

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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