Uneasy ECB May Mull Bank-Bond Buying Amid Unappealing Menu

Europe’s bond investors are starting to ask whether the European Central Bank will pair a potential interest rate cut with unprecedented purchases of senior bank debt.

Policy makers have previously shied away from buying unsecured bank bonds, not least because of possible conflicts of interest stemming from the ECB’s role in regulating banks it would be purchasing notes from. Still, they may consider it at a policy meeting next week, particularly if they vote to further lower negative interest rates that have been squeezing lenders’ profits for years.