ECB May Boost Euro Area Bond Purchases `Aggressively,' Goldman Sachs Says

The European Central Bank may increase purchases of government bonds to ensure the sovereign debt crisis abates, according to Goldman Sachs Group Inc.

“We remain convinced that the political will among policy makers, including the ECB, to prevent any systemic event is unquestionable,”Dirk Schumacher, an economist in Frankfurt, wrote in a research report dated yesterday. “We could easily see the ECB stepping up its bond purchases aggressively if things do not start to normalize.”

Goldman Sachs pushed back its forecast for the first increase in the ECB’s main rate to the fourth quarter of next year from the third quarter “on the back of renewed tensions and the ECB’s resolve to tackle these,” analysts including Schumacher wrote in the note.

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