Praet Says Buying Bonds for Fiscal Stability Beyond ECB Mandate
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European Central Bank Executive Board member Peter Praet said the ECB isn’t authorized to purchase sovereign bonds to support debt-strapped euro-region governments.
The ECB’s bond purchases are solely to restore transmission of its interest rates on financial markets and “cannot become a chronic situation,” Praet said in comments posted on the Website Debating Europe. “If it becomes a chronic situation, it would mean that it is not related to a situation where markets are in a panic mood, but to more fundamental issues about doubts of stability in some countries. And that’s absolutely clearly beyond the mandate of the central bank.”