There's a Potential Problem with the ECB's Plan to Buy Corporate Debt
A tiered system for a tiered eurozone.
Bazookas are big but they're also blunt.
Photographer: Jasper Juinen/Bloomberg *** Local Caption *** Mario DraghiThis article is for subscribers only.
Is this the chart that sparked a thousand monetary stimulus measures?
Analysts at Bank of America Merrill Lynch argue that despite years of low interest rates and asset purchases, the European Central Bank's monetary policy measures failed to produce a discernible effect on credit in recent months. With interest rates on government bonds drifting ever lower, spreads on investment-grade paper had actually gone up—a trend which could be attributed to continued concern over the impact of negative interest rates on eurozone banks.