ECB must buy covered bonds aggressively, or not at all

By Bill Thornhill
16 Oct 2014

The European Central Bank will face a dilemma when it embarks on its third covered bond purchase programme, which will start soon. Either the central bank buys covered bonds aggressively, something that it has vowed not to do, or it will fail to meet its own target for expanding its balance sheet.

The ECB is running out of policy options. Faced with falling eurozone growth and declining inflation the prospect that the central bank will need to embark on unconventional measures is drawing closer by the day. On Tuesday the German ZEW October current conditions sentiment index collapsed and is ...

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