ECB pondering next move as Coeuré makes strong hint about QE
The European Central Bank (ECB) has been tipped to propose a big asset purchase plan centred on government bonds early in 2015 amid concerns about a weakened economy and ongoing low inflation.
ECB board member Benoit Coeuré told The Wall Street Journal on Wednesday that “substantial” accounts of the ECB’s plans should be released four weeks after the meetings take place.
He said: “I see a broad consensus around the table in the governing council that we need to do more. It’s not that much of a question on whether we should do something, but more a discussion on the best way to do it.
“If we want to do more we obviously have to reach out to market segments where there is more liquidity and that is why the government bond market is the baseline option, which doesn’t necessarily mean we would only buy government bonds.”
Coeuré’s comments hinted that the ECB has now progressed to a design phase in its quantitative-easing plan. He also added that the central bank's easy-money policies will remain in effect for the immediate future.
“We were able to design [outright monetary transactions] the right way because we took concerns on board, and we are now going through exactly the same process. The more governors standing by this new instrument, the safer you feel that the pros and cons have been weighed in the right way," he said.