views

WAS THE ECB RIGHT TO BUY GREEK BONDS?

ELGA BARTSCH | MORGAN STANLEY
"Sterilisation is intended to be a signalling device that its bond purchase programme is not meant to be expansionary monetary policy. Otherwise it would be putting its credibility at risk. If there is a need to push liquidity into the markets then the ECB should consider new refinancing operations."

JENNIFER MCKEOWN | CAPITAL ECONOMICS
"The ECB will stress that its actions are being “sterilised” to offset any potential inflationary implications. But with the grim economic outlook suggesting that deflation is the bigger risk, we suspect that it might yet be forced into full-blown “quantitative easing”."

JACQUES CAILLOUX | RBS
"The decision the ECB took was the right one – if it had not, the market situation would have continued to deteriorate – and it needs to be prepared to step up its purchase programme. But I would be prepared to argue against sterilisation: culturally it makes sense but from an economic point of view it doesn’t make sense. The ECB must speak with one voice; this chaos is not fruitful."