ECB Plan Said to Pledge Unlimited, Sterilized Bond-Buying
By Jana Randow and Jeff Black - Sep 5, 2012 9:22 AM GMT-0300
European Central Bank PresidentMario Draghi’s bond-buying proposal involves unlimited purchases of government debt that will be sterilized to assuage concerns about printing money, two central bank officials briefed on the plan said.
Under the blueprint, which may be called “Monetary Outright Transactions,” the ECB would refrain from setting a public cap on yields, according to the people, and a third official, who spoke on condition of anonymity. The plan will only focus on government bonds rather than a broader range of assets and will target short-dated maturities of up to about three years, two of the people said.
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Comment: This news could be the final nail in the coffin of the euro shorts.
Under the blueprint, which may be called “Monetary Outright Transactions,” the ECB would refrain from setting a public cap on yields, according to the people, and a third official, who spoke on condition of anonymity. The plan will only focus on government bonds rather than a broader range of assets and will target short-dated maturities of up to about three years, two of the people said.
More
Comment: This news could be the final nail in the coffin of the euro shorts.
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