Monday, October 15, 2018 | ePaper

Five things to know about the ECB's bond-buying programme

  • Print
AFP, Frankfurt :
European Central Bank policymakers are set to discuss Thursday whether to withdraw their mass-bond-buying programme later this year, in a major vote of confidence - but also a risk - for the eurozone economy.
Here are five things to know about what the so-called "quantitative easing" (QE) programme is and why the decision matters for the 19-nation single currency area.
President Mario Draghi announced in January 2015 that the ECB would expand its interventions in financial markets with mass bond-buying.
After the financial crisis, the central bank's previous attempts to lift inflation towards its target of just below 2.0 percent - smaller asset purchase programmes and lower interest rates - had not done the job.
Steady inflation is seen as vital for healthy economic growth as it wards off deflation, or a spiral of decreasing prices that encourages people to hoard money rather than spend it.
QE is shorthand for the central bank creating money and using it to buy government bonds or other financial assets on the open market.
The aim is to encourage investors to move cash out of low-risk holdings like bonds and seek returns elsewhere, for example by lending to households and businesses.
In turn, those people and firms will spend money, powering economic growth and, so the theory goes, inflation.
As it manages a currency shared between 19 countries, the ECB's programme faces more constraints than those at the Federal Reserve in the United States, the Bank of England or the Bank of Japan.
The most important of these is a ban on the ECB buying too many of any one country's bonds, designed to avoid accusations of "monetary financing" - or the central bank footing the bill for government spending.
Some observers argue the central bank is approaching these limits, while others believe it can find more wiggle room to continue if needed.
QE has made it easier for eurozone companies, households and states to borrow money, saving them billions on interest payments.
Eurozone growth hit its highest level since 2007 last year, at 2.3 percent, while unemployment has fallen to its lowest levels in ten years, at 8.5 percent in March.

More News For this Category

A new channel partner showroom (DADU Motors) of Nitol Motors Ltd was inaugurated at Ullahpara in Sirajgonj on Sunday. Among others, Jayant Khosla, Asst. Country Manager,  Vishnue Kumaraswami,  Product  Manager, TATA Motors Ltd, Md. Mizanoor Rahman, Head of Dealer Network Expansion and Development, Tanvir Hasan, Product President  and Moyazzem Hussain, Area President, North Bengal  were present in the programme.

A new channel partner showroom (DADU Motors) of Nitol Motors Ltd was inaugurated at Ullahpara in Sirajgonj on Sunday. Among others, Jayant Khosla, Asst. Country Manager, Vishnue Kumaraswami, Product Manager, TATA Motors Ltd, Md. Mizanoor Rahman, Head of Dealer Network Expansion and Development, Tanvir Hasan, Product President and Moyazzem Hussain, Area President, North Bengal were present in the programme.

.

Farman R Chowdhury, Managing Director of Al-Arafah Islami Bank Ltd, poses with the participants of a day-day long training workshop on 'RMG Financing' at its Training and Research Institute on Monday. Principal of the Institute and Executive Vice President Md. Abdur Rahim Duary and Assistant Vice President Mujibur Rahman Rahman were also present in the ceremony.

Farman R Chowdhury, Managing Director of Al-Arafah Islami Bank Ltd, poses with the participants of a day-day long training workshop on 'RMG Financing' at its Training and Research Institute on Monday. Principal of the Institute and Executive Vice President Md. Abdur Rahim Duary and Assistant Vice President Mujibur Rahman Rahman were also present in the ceremony.

.

Inflation cools to 5.43pc

Reuters :Bangladesh's annual inflation eased in September to its lowest since March 2017, the statistics bureau said on Sunday, as food prices rose at a slower pace.Consumer prices in

APO, CIRDAP sign MoU to support agriculture, rural dev projects

UNB, Dhaka :The Asian Productivity Organization (APO) and Centre on Integrated Rural Development for Asia and the Pacific (CIRDAP) have signed a document to facilitate bilateral cooperation and support

JP Morgan, Ford cancel plans for Saudi investor event

Reuters :JP Morgan & Chase Co Chief Executive Jamie Dimon and Ford Motor Co Chairman Bill Ford cancelled plans to attend a Saudi investor conference, the companies said on

The 8th Executive Committee Meeting of 'SWIFT Member and Users Group of Bangladesh' held at Bank Asia Corporate Office in Dhaka on Sunday.  The occasion was chaired by Md Arfan Ali, Managing Director of Bank Asia Limited. The Chairperson of 'SWIFT Member & Users Group of Bangladesh', Senior Executives from several private commercial banks including Social Islami Bank, Jamuna Bank Ltd, Islami Bank, Sonali Bank Ltd and NCC Bank and representatives from more than 40 private commercial  bank were present at the meeting.

The 8th Executive Committee Meeting of 'SWIFT Member and Users Group of Bangladesh' held at Bank Asia Corporate Office in Dhaka on Sunday. The occasion was chaired by Md Arfan Ali, Managing Director of Bank Asia Limited. The Chairperson of 'SWIFT Member & Users Group of Bangladesh', Senior Executives from several private commercial banks including Social Islami Bank, Jamuna Bank Ltd, Islami Bank, Sonali Bank Ltd and NCC Bank and representatives from more than 40 private commercial bank were present at the meeting.

.

First Security Islami Bank Ltd sponsored 'the National Environment Olympiad, Art, Essay, Map and Poster Competition-2018' organized by the Department of Geography and Environment of Dhaka University. The closing ceremony of this event was held at Nabab Nawab Ali Chowdhury Senate Bhaban of Dhaka University on Sunday.  Prof. Dr. Akhtaruzzaman, Vice-Chancellor, the University was present as chief guest in the ceremony. Syed Waseque Md Ali, Managing Director of the Bank was also present.

First Security Islami Bank Ltd sponsored 'the National Environment Olympiad, Art, Essay, Map and Poster Competition-2018' organized by the Department of Geography and Environment of Dhaka University. The closing ceremony of this event was held at Nabab Nawab Ali Chowdhury Senate Bhaban of Dhaka University on Sunday. Prof. Dr. Akhtaruzzaman, Vice-Chancellor, the University was present as chief guest in the ceremony. Syed Waseque Md Ali, Managing Director of the Bank was also present.

.

'Shock not over' as Asian stocks extend slide

AFP, Tokyo :Asian stocks opened the week on the back foot Monday, with investors still in gloomy mood after several days of market turbulence sparked by trade rows and

Price fall in large-caps drives stocks down

Economic Reporter :Stock markets closed on Monday with downward trend due mainly to price fall in large-cap securities.The falling major sectors were cement, pharmaceutical and chemical, insurance and tannery

GP child online safety programme reaches more than 200,000 children

UNB, Dhaka :A child online safety programme launched by Grameenphone, Telenor Group, and Unicef, has recently reached more than 200,000 children of the country.The initial target of the program