Weekend Economists: Spock Lives! March 6-8, 2015

[Demeter]

17. ECB to begin buying bonds next week

http://www.dw.de/ecb-to-begin-buying-bonds-next-week/a-18296016

The European Central Bank has finally set a date for the launch of its massive sovereign bond-buying program aimed at providing cash to the ailing eurozone economy and lifting inflation. Following a meeting of the European Central Bank's rate-setting Governing Council in Cyprus on Thursday, ECB president Mario Draghi said the bank would start buying sovereign bonds from eurozone countries on Monday next week.

"We will on 9 March 2015 start purchasing euro-dominated public sector securities in the secondary market. We will also continue to purchase asset-backed securities and covered bonds which we started last year," Draghi told a news conference in the Cypriot capital Nikosia.

Germany's blue chip stock index, the DAX, jumped to a new high of 11,527 points after Draghi's comments. The euro fell to a fresh 11-year low against the dollar of $1.10.

In January, the central bank for the euro currency area unveiled an aggressive plan to stimulate the flagging eurozone economy that would involve printing 60 billion euros ($69.7 billion) a month from March this year until September 2016 to finance large-scale purchasing of public and private assets.

The ECB program, also known as quantitative easing, marks the most far-reaching attempt yet by the central bank to prop up the 19-member common currency bloc. In all, the bank intends to spend 1.14 trillion euros over 19 months to spur inflation and encourage lending in the real economy...MORE