THE EUROPEAN Central Bank’s controversial purchases of government bonds picked up pace last week as one of its top policymakers was preparing to quit the bank over the programme.
ECB figures published yesterday showed the bank bought €14bn worth of bonds during 1-7 September, up from €13.3bn the previous week and taking the programme’s total to €143bn.
The amount was above expectations. No previously-bought bonds matured last week and as usual the ECB said it will hold a “sterilisation” operation today to neutralise the inflation pressure the purchases create.
Debt crisis fears continued to escalate last week as Greece’s fiscal repair efforts appeared to be faltering and as Italy and Spain continued to be sucked deeper into the troubles.
Under the bond buy programme the ECB and the 17 Eurozone national central banks can buy government and corporate bonds from banks and other investors, but not directly from governments.
The ECB was also rocked last Friday by the sudden resignation of Juergen Stark, a move that sources said was down to his opposition to the bank’s bond purchases.
City A.M. Reporter