Print Magazine
Brussels Morning Newspaper
Wednesday, October 4, 2023
No Result
View All Result
  • Home
    • About Us
  • EU institutions
    • Commission
    • Parliament
    • Council
  • Europe
  • World
  • Economy
  • Culture and Society
  • In Depth
    • Ambassador’s Corner
    • The American Angle
    • Sustainable Perspective
    • Europe With Transparency
    • Place de la Bourse
    • The Macro-Economist
    • Southeast Europe
Brussels Morning Newspaper
  • Home
    • About Us
  • EU institutions
    • Commission
    • Parliament
    • Council
  • Europe
  • World
  • Economy
  • Culture and Society
  • In Depth
    • Ambassador’s Corner
    • The American Angle
    • Sustainable Perspective
    • Europe With Transparency
    • Place de la Bourse
    • The Macro-Economist
    • Southeast Europe
Brussels Morning Newspaper
No Result
View All Result
Home Economy

ECB prepares scheme to offset bond purchases

Nikola Kiš by Nikola Kiš
28 June 2022
in Economy
Frankfurt,,Hesse,,Germany,-,May,16,,2018:,Sign,At,The

Frankfurt, Hesse, Germany - May 16, 2018: Sign at the entrance to new European Central Bank headquarters in Frankfurt, Germany - the ECB is the central bank for the euro

Share on FacebookShare on Twitter

Belgium, (Brussels Morning Newspaper) The European Central Bank (ECB) is preparing a scheme to offset bond purchases by draining cash from the banking system, according to two sources.

Since the central bank announced plans to stop buying member states’ debt and start upping interest rates, bond yields of indebted EU countries started to rise quickly, Reuters reports on Tuesday.

The ECB’s announcements are aimed at curbing inflation, which has well exceeded the central bank’s target of 2% and continues to rise.

The ECB has been working on a new bond-buying scheme to limit the spread between bond yields of severely indebted EU member states and stronger economies in the bloc.

The body will have to up borrowing costs for the eurozone, but cap yields for weaker EU member states.

According to the sources, the ECB is planning to couple its new bond purchasing scheme with auctions that would allow banks to hold cash at the ECB at more favourable terms than deposits.

The move is similar to the one ECB made about a decade ago, but this time the banking system has more leeway as the central bank created excess reserves in the system of nearly 4.5 trillion euro over the last ten years or so.

Ignazio Visco, Governor of the Bank of Italy, noted earlier this month that the ECB could focus on interest rates rather than selling bonds, suggesting that the central bank could opt for a move similar to the one sources announced.

Plan acceptable to strong economies

The solution would be more acceptable to strong EU economies like Germany than selling bonds from such countries as it would not cause losses for the national central bank.

The ECB previously announced plans to present the new scheme at the Governing Council meeting slated for July, stressing that it will be aimed at limiting the spread between bond yields in the EU.

While the body has not prepared the scheme, announcements suggest that it will come with requirements for beneficiaries, including compliance with the European Commission’s economic recommendations.

Tags: Main-Slideroffset bond purchases
Follow Brussels Morning
Facebook Twitter Youtube Linkedin

About Us

Brussels Morning is a daily online newspaper based in Belgium. BM publishes unique and independent coverage on international and European affairs. With a Europe-wide perspective, BM covers policies and politics of the EU, significant Member State developments, and looks at the international agenda with a European perspective.

More Info

  • About Us
  • Advertising
  • Cookie Policy
  • Contact Us
  • FAQ
  • Jobs

Categories

  • Belgium News
  • Brussels
  • Culture and Society
  • Economy
  • EU Institutions
  • Commission
  • Council
  • Parliament
  • Europe
  • Features
  • Health & Fitness
  • In Depth
  • Ambassador’s Corner
  • Europe With Transparency
  • Place de la Bourse
  • Southeast Europe
  • Sustainable Perspective
  • The American Angle
  • The Macro-Economist
  • Member States
  • Opinion
  • Our pick
  • Uncategorised
  • World
  • Diplomacy
  • Middle East Eye
  • US Elections
  • Join Our Newsletter

    Brussels Morning Newspaper – All Rights Reserved © 2020

    No Result
    View All Result
    • Home
    • About Us
    • Brussels Bubble
      • Parliament
      • Commission
      • Council
    • Wider Europe
      • Member States
    • World
    • Business & Society
    • Europe With Transparency
    • Culture & Society
    • Policy Talks
      • Place de la Bourse
      • The Macro-Economist
      • Sustainable Perspective
      • Ambassador’s Corner
      • The American Angle
      • Southeast Europe
    • Print Magazine

    Brussels Morning Newspaper - All Rights Reserved © 2020

    We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies.
    Cookie settingsACCEPT
    Privacy & Cookies Policy

    Privacy Overview

    This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
    Necessary
    Always Enabled
    Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
    Non-necessary
    Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
    SAVE & ACCEPT