ACCA welcomes today’s launch by the European Central Bank (ECB)'s of an expanded asset purchase programme, entailing the existing purchase programmes for asset-backed securities and covered bonds. As from March 2015, the Eurosystem will start to purchase euro-denominated investment-grade securities issued by euro area governments and agencies as well as European institutions in the secondary market.
Chas Roy-Chowdhury, head of taxation at ACCA says: 'For ACCA, the ECB announcement that it will undertake combined monthly purchases of public and private sector securities amounting to €60 billion should be commended. We hope that, as time passes, the ECB will increase the power of these measures by not time-limiting the bond-buying period. We are pleased to see that the ECB intends to carry out the initiative until end-September 2016, and possibly further, as Mario Draghi indicated 'until a sustained adjustment in the path of inflation' is reached.
'Although we recognise that bond-buying is not a silver bullet, and that other parallel measures are necessary to reinvigorate 'new blood' in the EU economy, this is a positive stepping stone. We hope that this initiative will not face too much opposition, leaving the door open to longer term Quantitative Easing' Chas Roy-Chowdhury explains.
'We would also encourage the ECB to consider in tandem reducing interest rates to zero or even into the negative, as the Danish central bank did in the past few days' Chas Roy-Chowdhury concludes.
