ECB's QE programs are too small – IIF

EUR/USD remains bid well above 1.21 even though the European Central Bank boosted its asset purchase program last week. According to Robin Brooks, Chief Economist at the Institute of International Finance (IIF), the central bank's current quantitative easing programs (asset purchases) are too small. 

"ECB's buying of government bonds used to exceed the new supply of debt, where the idea was to drive investors out of gov't bonds into risk assets, jump-starting growth & inflation. This portfolio shift isn't happening now," Brooks tweeted. 

Under Mario Draghi's leadership, the ECB's purchases forced a portfolio shift, with foreigners and banks selling to the central bank, which isn't happening now.