Market hankers after sovereign QE but doubts raised

By Craig McGlashan, Tessa Wilkie
23 Oct 2014

Growing indications that the European Central Bank's moves so far have not been enough to boost falling inflation expectations, or improve a flat-lining real economy in Europe, have some market participants hoping that the central bank will unveil a round of sovereign bond buying to shock the economy back to life. But the ECB’s actions may fall short of expectations.

Sovereign quantitative was on the tip of many tongues among bankers this week, fuelled in part by leaks from the ECB about a potential new corporate bond buying programme (see Corporate Bonds) and its tepid first step into the covered bond market (see lead story). But these programmes ...

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