Vitor Constancio, vice president of the European Central Bank,
played down worries in financial markets that the ECB will not be
able to find enough bonds to complete its "quantitative easing" as
planned.
Starting next month the ECB plans to buy 60 billion euros of
debt securities a month until September 2016. Some investors worry
that top-rated bonds are already in short supply--especially
Germany's, which make up the largest individual chunk of the
program. German government debt, or bunds, will account for just
over a quarter of the purchases, or around EUR12 billion each
month.
Mr. Constancio said the pool of available bonds for purchases is
EUR4 trillion, a "deep" market with "a lot of investors."
"We don't anticipate that there will be such a problem," he
said.
The German treasury says it expects to issue this year EUR147
billion of eligible bonds--those with maturities of two to 30
years--while EUR132 billion of bonds will mature, meaning net new
bund issuance of just EUR15 billion for the whole year.
Overall, the ECB's plans mean it has to buy EUR215 billion of
German government bonds between this March and September 2016--26
times more than the amount the German government bond market is
predicted to grow over the same period, Morgan Stanley says.
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