{"id":108121,"date":"2021-02-26T17:49:56","date_gmt":"2021-02-26T17:49:56","guid":{"rendered":"https:\/\/fin2me.com\/?p=108121"},"modified":"2021-02-26T17:49:56","modified_gmt":"2021-02-26T17:49:56","slug":"exclusive-ecbs-stournaras-calls-for-increasing-bond-buying-to-calm-markets","status":"publish","type":"post","link":"https:\/\/fin2me.com\/business\/exclusive-ecbs-stournaras-calls-for-increasing-bond-buying-to-calm-markets\/","title":{"rendered":"Exclusive: ECB's Stournaras calls for increasing bond buying to calm markets"},"content":{"rendered":"

FRANKFURT (Reuters) – Greece\u2019s Yannis Stournaras became the first European Central Bank policymaker on Friday to openly call for increasing the pace of ECB bond purchases to stem a rise in borrowing costs.<\/p>

Slideshow ( 2 images )<\/span><\/figcaption>

With euro zone bond yields set for their biggest monthly rise in three years, the ECB is under some pressure to make good on its promise to keep borrowing costs easy for the coronavirus-stricken bloc through its Pandemic Emergency Purchase Programme (PEPP).<\/p>\n

\u201cIn my view, there is an unwarranted tightening of bond yields, so it would perhaps be desirable for the ECB to accelerate the pace of PEPP purchases to ensure favourable financing conditions during the pandemic,\u201d Stournaras told Reuters in an interview.<\/p>\n

\u201cIn my view there\u2019s no fundamental justification for a tightening of nominal bond yields in the long end,\u201d the Greek central bank governor said.<\/p>\n

Stournaras said ECB policymakers should instruct the Executive Board, which runs day-to-day business including bond purchases, to intervene accordingly when they meet on March 11.<\/p>\n

He added that they may also alter the ECB\u2019s policy message \u201cslightly\u201d, although he said no material change was needed as the central bank still had almost 1 trillion euros left to spend in its PEPP arsenal.<\/p>\n

Germany\u2019s 10-year bond yield, the region\u2019s benchmark, fell to its lowest for the day at -0.287% after Stournaras\u2019 comments. It was still set for its biggest monthly gain since January 2018, however, with a 24 basis point rise.<\/p>\n

\u201cThis is a big shift from the message we have been used to and it remains to be seen whether other ECB members share the same view,\u201d said Divyang Shah, global strategist at IFR Markets.<\/p>\n

Earlier on Friday, ECB board members Philip Lane and Isabel Schnabel had said bond yields warranted monitoring but stopped short of calling for more purchases.<\/p>\n

\u201cAt this stage, an excessive tightening in yields would be inconsistent with fighting the pandemic shock to the inflation path,\u201d Lane said in an interview with Spanish newspaper Expansi\u00f3n.<\/p>\n

\u201cBut at the same time, it is crystal clear that we are not engaged in yield curve control, in the sense that we want to keep a particular yield constant\u201d.<\/p>\n

Schnabel was even more cautious, saying that a gradual rise in bond yields would even be welcome if it reflected higher inflation expectations, showing that the ECB\u2019s stimulus is working.<\/p>\n

\u201cEven gradual increases in real yields may not necessarily be a cause of concern if they reflect improving growth prospects,\u201d Schnabel added.<\/p>\n

Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

FRANKFURT (Reuters) – Greece\u2019s Yannis Stournaras became the first European Central Bank policymaker on Friday to openly call for increasing the pace of ECB bond […]<\/p>\n","protected":false},"author":3,"featured_media":108120,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"yoast_head":"\nExclusive: ECB's Stournaras calls for increasing bond buying to calm markets - Fin2me<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fin2me.com\/business\/exclusive-ecbs-stournaras-calls-for-increasing-bond-buying-to-calm-markets\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Exclusive: ECB's Stournaras calls for increasing bond buying to calm markets - Fin2me\" \/>\n<meta property=\"og:description\" content=\"FRANKFURT (Reuters) – Greece\u2019s Yannis Stournaras became the first European Central Bank policymaker on Friday to openly call for increasing the pace of ECB bond [...]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/fin2me.com\/business\/exclusive-ecbs-stournaras-calls-for-increasing-bond-buying-to-calm-markets\/\" \/>\n<meta property=\"og:site_name\" content=\"Fin2me\" \/>\n<meta property=\"article:published_time\" content=\"2021-02-26T17:49:56+00:00\" \/>\n<meta name=\"author\" content=\"Mark\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/fin2me.com\/wp-content\/uploads\/2021\/02\/cnewsfotor27-3.jpg\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Mark\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/fin2me.com\/business\/exclusive-ecbs-stournaras-calls-for-increasing-bond-buying-to-calm-markets\/\",\"url\":\"https:\/\/fin2me.com\/business\/exclusive-ecbs-stournaras-calls-for-increasing-bond-buying-to-calm-markets\/\",\"name\":\"Exclusive: ECB's Stournaras calls for increasing bond buying to calm markets - 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