Jazbec Says Too Early to Discuss Stock Buying as ECB Reviews QE

  • Governing Council is looking to make QE ‘more efficient’
  • ECB’s 1.7 trillion-euro QE program runs through March

It’s “definitely too early” for the European Central Bank to consider buying shares as it reviews its 1.7 trillion-euro ($1.9 trillion) asset-purchase program, Governing Council member Bostjan Jazbec said on Thursday.

“We are monitoring data, it’s difficult to give a one-way answer on buying shares,” Jazbec, who is also the governor of Slovenia’s central bank, told reporters in Ljubljana. “We are discussing non-standard measures all the time, including those options that would make the ECB’s monetary policy more efficient.”

President Mario Draghi has ordered central-bank staff to study how to ensure the ECB’s quantitative-easing program doesn’t run out of assets to buy, while playing down the need to commit to fresh stimulus just yet. The ECB is currently buying roughly 80 billion euros of government bonds, asset-backed securities and corporate debt per month as part of the program, which is set to expire in March.

There are no legal obstacles to prevent the ECB from buying equities, according to ABN Amro economists, who say the central bank could purchase as much as 200 billion euros of ETFs. This would mostly benefit France, Netherlands and Germany. It’s also “questionable” whether such purchases would have a major impact on inflation and they could expose the ECB to higher risk of losses, ABN’s economist Nick Kounis and fixed-income strategist Kim Liu said in a report on Wednesday.

The Governing Council discussed “all assets but gold” when trying to determine the shape of its quantitative-easing program, Draghi said in December 2014.

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