- A person familiar with a matter
The European Central Bank is pondering to purchase corporate bonds on the secondary market and may make the corresponding decision as soon as December, several people familiar with a matter said. The central bank may begin buying bonds already in the beginning of next year. This would expand the recently launched private-sector asset-buying scheme, part of a private-sector asset-purchase programme that will also see it buy asset-backed securities later this year. It is estimated that the central bank could inject one trillion euros into the Euro zone's financial system. These measures are aimed at increasing lending to businesses and thereby support the Euro zone economy. However, there is concern at the ECB that these measures may have an insufficient effect to help support the economy.
The ECB has already bought Spanish, French and German covered bonds with maturities from one to six years. The central bank will publish the exact amounts purchased every Monday. The other part of its asset-buying programme, the ABS purchases, will begin in the fourth quarter and will be accompanied by another tool, a second round of TLTROs, or four-year loans at ultra-cheap rates offered to the region's banking sector. The policy makers hope that all these measures along with borrowing costs at historic low are seen to lift price growth in the Euro area and boost the economy through increased lending to the private sector.
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