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More ECB Bond Buying Is A Matter of Time as Debt Balloons

  • Central bank will have to soak up bonds to keep yields down
  • Italy is at the center of concerns over debt sustainability
The European Central Bank (ECB) headquarters stands in Frankfurt, Germany.

The European Central Bank (ECB) headquarters stands in Frankfurt, Germany.

Photographer: Andreas Arnold/Bloomberg
Updated on

It’s increasingly becoming a question of when, not if, the European Central Bank will pump up its emergency bond buying program to help the most vulnerable euro-area economies avoid a deeper recession.

With countries relying on borrowing to finance their response to the coronavirus pandemic, the ECB will likely take on more of that bond supply, as private investors steer away from taking on risk. The crisis will spur governments to issue an extra 850 billion euros ($935 billion) this year, according to analysts at ABN Amro.