Germany ‘slaps ECB in face’ to undermine QE in hour of greatest need

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By Jasper Cox, Lewis McLellan
06 May 2020

Germany's Federal Constitutional Court (BVG) fired a warning shot at the European Central Bank this week. The court’s threat to stop the Bundesbank from taking part in official asset purchasing could have serious consequences for ECB monetary policy and, by extension, bond markets, just when the markets seem to be relying on the central bank more than ever, write Jasper Cox and Lewis McLellan.

The BVG was asked to decide whether the ECB’s Public Sector Purchase Programme (PSPP) was legal in Germany. The court said it was, but that it requires a proportionality assessment of the policy. If one is not forthcoming, the BVG said it will ban the Bundesbank from taking ...

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