It has thrown the kitchen sink, to little effect. Has it got anything left?by George Magnus / March 10, 2016 / Leave a comment
Ahead of today’s European Central Bank meeting, it was expected that to stir the eurozone’s economy the Bank would have to announce strong measures. In the event, it went even further, and threw the kitchen sink at the eurozone. But apparently, this has had little effect.
So what did the ECB announce that was so substantial? For starters, The negative interest rate on the Bank’s main deposit facility was lowered from -30 to -40 basis points. This is what other banks are charged to hold deposits at the ECB.
The monthly bond purchases under the ECB’s QE programe will be raised from €60 to €80 billion a month. Though the March 2017 end-date for the programme has been kept, Mario Draghi (President of the ECB) did say that it might be extended if necessary. The ECB will also include in its asset purchases investment-grade, non-bank corporate bonds, with effect from Ju…