A Cautionary Tale on QE for Mario Draghi’s ECB
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Spasms of volatility upend markets. Dealers dump securities they’ve hoarded and borrowing costs surge.
That’s one scenario investors risk as they prepare for the European Central Bank’s bond-buying program. And their biggest reason for concern is because it happened before. Japan’s government-debt market was rocked after its central bank expanded a quantitative-easing program in April 2013.