The European Central Bank (ECB) cut interest rates and will start buying assets, easing the flow of funding for the region's economy while holding back for now on larger-scale action.
The ECB "will purchase a broad portfolio of simple and transparent securities," President Mario Draghi said at a press conference in Frankfurt today. While the measures announced today will have a "sizable" impact on the balance sheet, "some of our council were in favor of doing more than presented," he said. The euro dropped below US$1.30 for the first time since July 2013.
In committing cash to the market for asset-backed securities (ABS), Draghi is making good on his pledge to help rekindle an asset class that can funnel loans to the real economy and ease funding conditions for banks. While the size of the plan wasn't given, it probably doesn't represent the kind of quantitative easing that could directly fend off the threat of deflation.
Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.
Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
- Exclusive discounts on ALM and Treasury & Risk events.
- Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.
*May exclude premium content
Already have an account? Sign In
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
