Covered bond buying branded ‘insane’ as ECB goes for QE-lite

Bill Thornhill,

Tom Porter

September 04, 2014 08:00 PM

Draghi in darkness — Mario Draghi, president of the European Central Bank (ECB) attends the ECB press conference in Frankfurt/Main, Germany, 04 September 2014. The ECB reduced the base rate to a historic low of 0,05 percent. Photo: Frank Rumpenhorst/dpa | Frank Rumpenhorst/DPA/Press Association Images

The European Central Bank surprised ABS bankers and infuriated many of their covered bond peers on Thursday by committing to a broad purchase programme for both asset classes. The move was welcomed in the ABS market and sparked a fresh hunt for secondary paper, but deprived of more detail bankers were unable to say how quickly the measures would encourage more primary issuance, if at all.

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Bill Thornhill

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Tom Porter