ECB: Inflation or bubble builder

David Scutt

Scutt Partners

ECB: Inflation or bubble builder? €60b per month, starting in March and running through to September 2016, consisting of purchases of sovereign and private-sector securities with durations of 2 to 30 years for the former regardless of yield. Securities must be investment grade, some exceptions will apply to nation's part of an EU/IMF program, with purchases to be conducted by National Central Banks (NCB's) under the oversight of the European Central Bank (ECB). Purchase quantities will be based on the share of an individual Central Bank's capital held at the ECB. NCB's will assume the individual risk of sovereign bonds purchased with 20% of assets, largely private-sector securities purchased, subject to loss sharing between NCB's and the ECB themselves. While scheduled to run until September 2016 purchases will continue until the ECB see 'a sustained adjustment in the path of inflation which is consistent with (their) aim of achieving inflation rates below, but close to, 2% over the medium term'. (VIEW LINK)


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Independent Market Strategist
Scutt Partners

David is a Director of Scutt Partners Pty Ltd and has successfully worked in the financial services markets over the past 12 years with both large and smaller banking groups. He has provided strategic financial analysis for currency and interest...

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