2 Jul 2015
Corporate bonds now included into QE Program – ECB Chief Draghi
FXStreet (Mumbai) - The European Central Bank (ECB) announced on Thursday that it is expanding its massive bond-buying program (QE) to include corporate bonds issuers.
It is viewed that this incorporation will help the ECB keep pumping more liquidity into the markets and possibly become a valuable tool if the Greek crisis hits the markets.
The ECB notified on its web site, "In its implementation of the public sector purchase programme (PSPP), the Eurosystem intends to conduct purchases in a gradual and broad-based manner, aiming to achieve market neutrality in order to avoid interfering with the market price formation mechanism,"
"In principle, purchases of nominal marketable debt instruments at a negative yield to maturity are permissible as long as the yield is above the deposit facility rate."
The ECB's existing program is committed to buying €60 billion of government debt each month, with newly printed money and is scheduled to last until September 2016.
It is viewed that this incorporation will help the ECB keep pumping more liquidity into the markets and possibly become a valuable tool if the Greek crisis hits the markets.
The ECB notified on its web site, "In its implementation of the public sector purchase programme (PSPP), the Eurosystem intends to conduct purchases in a gradual and broad-based manner, aiming to achieve market neutrality in order to avoid interfering with the market price formation mechanism,"
"In principle, purchases of nominal marketable debt instruments at a negative yield to maturity are permissible as long as the yield is above the deposit facility rate."
The ECB's existing program is committed to buying €60 billion of government debt each month, with newly printed money and is scheduled to last until September 2016.