{"id":10641,"date":"2016-09-02T01:22:36","date_gmt":"2016-09-01T22:22:36","guid":{"rendered":"http:\/\/bestinsurance.gr\/a1\/?p=10641"},"modified":"2016-09-02T01:22:36","modified_gmt":"2016-09-01T22:22:36","slug":"is-the-ecb-buying-bonds-from-itself","status":"publish","type":"post","link":"https:\/\/bestinsurance.gr\/a1\/archives\/10641","title":{"rendered":"Is the ECB Buying Bonds From Itself?"},"content":{"rendered":"<div data-animation=\"no-animation\" data-icons-animation=\"no-animation\" data-overlay=\"\" data-change-size=\"\" data-button-size=\"0.7\" style=\"font-size:0.7em!important;display:none;\" class=\"supsystic-social-sharing supsystic-social-sharing-package-flat supsystic-social-sharing-content supsystic-social-sharing-content-align-left\" data-text=\"\"><a data-networks=\"[]\" class=\"social-sharing-button sharer-flat sharer-flat-1 counter-arrowed facebook\" target=\"_blank\" title=\"Facebook\" href=\"http:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fbestinsurance.gr%2Fa1%2Farchives%2F10641\" data-main-href=\"http:\/\/www.facebook.com\/sharer.php?u={url}\" data-nid=\"1\" data-name=\"\" data-pid=\"1\" data-post-id=\"10641\" data-url=\"https:\/\/bestinsurance.gr\/a1\/wp-admin\/admin-ajax.php\" rel=\"nofollow\" data-mailto=\"\"><i class=\"fa-ssbs fa-ssbs-fw fa-ssbs-facebook\"><\/i><div class=\"counter-wrap arrowed\"><span class=\"counter\">0<\/span><\/div><\/a><a data-networks=\"[]\" class=\"social-sharing-button sharer-flat sharer-flat-1 counter-arrowed twitter\" target=\"_blank\" title=\"Twitter\" href=\"https:\/\/twitter.com\/share?url=https%3A%2F%2Fbestinsurance.gr%2Fa1%2Farchives%2F10641&text=Is+the+ECB+Buying+Bonds+From+Itself%3F\" data-main-href=\"https:\/\/twitter.com\/share?url={url}&text={title}\" data-nid=\"2\" data-name=\"\" data-pid=\"1\" data-post-id=\"10641\" data-url=\"https:\/\/bestinsurance.gr\/a1\/wp-admin\/admin-ajax.php\" rel=\"nofollow\" data-mailto=\"\"><i class=\"fa-ssbs fa-ssbs-fw fa-ssbs-twitter\"><\/i><div class=\"counter-wrap arrowed\"><span class=\"counter\">0<\/span><\/div><\/a><\/div><p>Is the ECB Buying Bonds From Itself?The European Central Bank may be buying bonds from itself as it runs out of debt to sate its massive quantitative easing program.<\/p>\n<p>That\u2019s according to economists at Jefferies.<\/p>\n<p>The ECB\u2019s bond-buying program has been running for nearly 18 months, and investors and analysts have often asked whether the central bank is running out of debt to buy.<\/p>\n<p>Now, the ECB may be indirectly buying bonds from itself, according to Marchel Alexandrovich and David Owen at Jefferies, in a research note published Thursday.<\/p>\n<p style=\"margin-right: 0px; margin-bottom: 18px; margin-left: 0px; padding: 0px; border: 0px; vertical-align: baseline; font-family: &quot;Chronicle SSm&quot;, serif; line-height: 28px; word-wrap: break-word; color: rgb(51, 51, 51); background-image: initial; background-attachment: initial; background-size: initial; background-origin: initial; background-clip: initial; background-position: 0px 0px; background-repeat: initial;\">The ECB did not immediately reply to an attempt to seek comment.<\/p>\n<p style=\"margin-right: 0px; margin-bottom: 18px; margin-left: 0px; padding: 0px; border: 0px; vertical-align: baseline; font-family: &quot;Chronicle SSm&quot;, serif; line-height: 28px; word-wrap: break-word; color: rgb(51, 51, 51); background-image: initial; background-attachment: initial; background-size: initial; background-origin: initial; background-clip: initial; background-position: 0px 0px; background-repeat: initial;\">But here\u2019s how Jefferies thinks it may work. The ECB\u2019s QE program is implemented through several national central banks, like Germany\u2019s Bundesbank and Spain\u2019s Banco de Espana. National central banks buy bonds according to rules set by the ECB.<\/p>\n<p style=\"margin-right: 0px; margin-bottom: 18px; margin-left: 0px; padding: 0px; border: 0px; vertical-align: baseline; font-family: &quot;Chronicle SSm&quot;, serif; line-height: 28px; word-wrap: break-word; color: rgb(51, 51, 51); background-image: initial; background-attachment: initial; background-size: initial; background-origin: initial; background-clip: initial; background-position: 0px 0px; background-repeat: initial;\">The problem is that these constraints narrow the stock of debt the banks can buy from. These rules prevent the purchase of too much debt from any one country and stop central banks from buying debt with steeply negative yields. Portuguese and Irish debt, for instance, is now becoming scarce.<\/p>\n<p style=\"margin-right: 0px; margin-bottom: 18px; margin-left: 0px; padding: 0px; border: 0px; vertical-align: baseline; font-family: &quot;Chronicle SSm&quot;, serif; line-height: 28px; word-wrap: break-word; color: rgb(51, 51, 51); background-image: initial; background-attachment: initial; background-size: initial; background-origin: initial; background-clip: initial; background-position: 0px 0px; background-repeat: initial;\">But the national central banks also sell sovereign bonds. They sometimes reduce their holdings as a part of their reserve management activities, which aim to ensure that banks, state institutions and other organizations \u201cmanage their euro-denominated reserve assets comprehensively, efficiently, and in a safe, confidential and reliable environment,\u201d according to the ECB\u2019s website.<\/p>\n<p style=\"margin-right: 0px; margin-bottom: 18px; margin-left: 0px; padding: 0px; border: 0px; vertical-align: baseline; font-family: &quot;Chronicle SSm&quot;, serif; line-height: 28px; word-wrap: break-word; color: rgb(51, 51, 51); background-image: initial; background-attachment: initial; background-size: initial; background-origin: initial; background-clip: initial; background-position: 0px 0px; background-repeat: initial;\">That means, for example, that while the German Bundesbank bought \u20ac209 billion in sovereign bonds between March and July, they also sold off \u20ac43 billion of such debt, according to Jefferies.<\/p>\n<p style=\"margin-right: 0px; margin-bottom: 18px; margin-left: 0px; padding: 0px; border: 0px; vertical-align: baseline; font-family: &quot;Chronicle SSm&quot;, serif; line-height: 28px; word-wrap: break-word; color: rgb(51, 51, 51); background-image: initial; background-attachment: initial; background-size: initial; background-origin: initial; background-clip: initial; background-position: 0px 0px; background-repeat: initial;\">Those securities are then back on the market to be bought, potentially helping the central banks to work around the program\u2019s restrictions.<\/p>\n<p style=\"margin-right: 0px; margin-bottom: 18px; margin-left: 0px; padding: 0px; border: 0px; vertical-align: baseline; font-family: &quot;Chronicle SSm&quot;, serif; line-height: 28px; word-wrap: break-word; color: rgb(51, 51, 51); background-image: initial; background-attachment: initial; background-size: initial; background-origin: initial; background-clip: initial; background-position: 0px 0px; background-repeat: initial;\">\u201cThis suggests that one of the ways that QE has been implemented, especially in the countries where scarcity may be an issue, is that the (National Central Bank) is essentially buying bonds from itself; or more intriguingly, perhaps even from the other NCBs in the Eurosystem,\u201d said Mr. Alexandrovich, one of the economists.<\/p>\n<p style=\"margin-right: 0px; margin-bottom: 18px; margin-left: 0px; padding: 0px; border: 0px; vertical-align: baseline; font-family: &quot;Chronicle SSm&quot;, serif; line-height: 28px; word-wrap: break-word; color: rgb(51, 51, 51); background-image: initial; background-attachment: initial; background-size: initial; background-origin: initial; background-clip: initial; background-position: 0px 0px; background-repeat: initial;\">The ECB\u2019s coming meeting and press conference on September 8 will be watched closely for any news on whether the bank will expand its QE program, including any loosening of the restrictions currently causing shortages of eligible debt.<\/p>\n<p style=\"margin-right: 0px; margin-bottom: 18px; margin-left: 0px; padding: 0px; border: 0px; vertical-align: baseline; font-family: &quot;Chronicle SSm&quot;, serif; line-height: 28px; word-wrap: break-word; color: rgb(51, 51, 51); background-image: initial; background-attachment: initial; background-size: initial; background-origin: initial; background-clip: initial; background-position: 0px 0px; background-repeat: initial;\">Source :&nbsp;<a href=\"http:\/\/blogs.wsj.com\/moneybeat\/2016\/09\/01\/is-the-ecb-buying-bonds-from-itself\/\">link<\/a><\/p>\n<p><span id=\"img_container_1472768485005\" class=\"img_container\"><progress id=\"progress_1472768485005\" value=\"0.9\" class=\"wp_media_indicator\" contenteditable=\"false\"><\/progress><\/span><\/p>\n<p style=\"margin-right: 0px; margin-bottom: 18px; margin-left: 0px; padding: 0px; border: 0px; vertical-align: baseline; font-family: &quot;Chronicle SSm&quot;, serif; line-height: 28px; word-wrap: break-word; color: rgb(51, 51, 51); background-image: initial; background-attachment: initial; background-size: initial; background-origin: initial; background-clip: initial; background-position: 0px 0px; background-repeat: initial;\">\n<p style=\"margin-right: 0px; margin-bottom: 18px; margin-left: 0px; padding: 0px; border: 0px; vertical-align: baseline; font-family: &quot;Chronicle SSm&quot;, serif; line-height: 28px; word-wrap: break-word; color: rgb(51, 51, 51); background-image: initial; background-attachment: initial; background-size: initial; background-origin: initial; background-clip: initial; background-position: 0px 0px; background-repeat: initial;\">&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<div data-animation=\"no-animation\" data-icons-animation=\"no-animation\" data-overlay=\"\" data-change-size=\"\" data-button-size=\"0.7\" style=\"font-size:0.7em!important;display:none;\" class=\"supsystic-social-sharing supsystic-social-sharing-package-flat supsystic-social-sharing-content supsystic-social-sharing-content-align-left\" data-text=\"\"><a data-networks=\"[]\" class=\"social-sharing-button sharer-flat sharer-flat-1 counter-arrowed facebook\" target=\"_blank\" title=\"Facebook\" href=\"http:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fbestinsurance.gr%2Fa1%2Farchives%2F10641\" data-main-href=\"http:\/\/www.facebook.com\/sharer.php?u={url}\" data-nid=\"1\" data-name=\"\" data-pid=\"1\" data-post-id=\"10641\" data-url=\"https:\/\/bestinsurance.gr\/a1\/wp-admin\/admin-ajax.php\" rel=\"nofollow\" data-mailto=\"\"><i class=\"fa-ssbs fa-ssbs-fw fa-ssbs-facebook\"><\/i><div class=\"counter-wrap arrowed\"><span class=\"counter\">0<\/span><\/div><\/a><a data-networks=\"[]\" class=\"social-sharing-button sharer-flat sharer-flat-1 counter-arrowed twitter\" target=\"_blank\" title=\"Twitter\" href=\"https:\/\/twitter.com\/share?url=https%3A%2F%2Fbestinsurance.gr%2Fa1%2Farchives%2F10641&text=Is+the+ECB+Buying+Bonds+From+Itself%3F\" data-main-href=\"https:\/\/twitter.com\/share?url={url}&text={title}\" data-nid=\"2\" data-name=\"\" data-pid=\"1\" data-post-id=\"10641\" data-url=\"https:\/\/bestinsurance.gr\/a1\/wp-admin\/admin-ajax.php\" rel=\"nofollow\" data-mailto=\"\"><i class=\"fa-ssbs fa-ssbs-fw fa-ssbs-twitter\"><\/i><div class=\"counter-wrap arrowed\"><span class=\"counter\">0<\/span><\/div><\/a><\/div><p>Is the ECB Buying Bonds From Itself?The European Central Bank may be buying bonds from itself as it runs out of debt to sate its massive quantitative easing program. That\u2019s according to economists at Jefferies. The ECB\u2019s bond-buying program has been running for nearly 18 months, and investors and analysts have often asked whether the<\/p>\n","protected":false},"author":1,"featured_media":10640,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[],"class_list":["post-10641","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-1"],"jetpack_publicize_connections":[],"_links":{"self":[{"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/posts\/10641","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/comments?post=10641"}],"version-history":[{"count":1,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/posts\/10641\/revisions"}],"predecessor-version":[{"id":10642,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/posts\/10641\/revisions\/10642"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/media\/10640"}],"wp:attachment":[{"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/media?parent=10641"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/categories?post=10641"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/tags?post=10641"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}