BLAST OFF! ECB to Buy Bonds, Bundesbank Furious
European Central Bank President Mario Draghi has pledged to do whatever it takes to preserve the euro. In line with this, the ECB has agreed to a new bond-buying program on September 6, which Draghi says will “safeguard the monetary policy transmission in all countries in the euro zone area.”
Investing Insights: These 5 Big Banks LOVE Mario Draghi.
Draghi claims that fears of the irreversibility of the euro are unfounded. The new program should create a fully effective backstop and lower the borrowing cost of struggling euro zone countries. The ECB would buy debt in the open market with a maturity between one and three years.
Deutcshe Bundesbank chief Jens Weidmann, who opposes the plan, has considered resigning in light of the move. However, European and U.S. stocks have rallied strongly after the announcement.
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