ECB policymakers debated more bond buying and bank lending – sources
FRANKFURT (Reuters) – European Central Bank policymakers already debated the ingredients of their next anti-pandemic stimulus package on Thursday, with more bond purchases and multi-year loans to banks receiving the most attention, said sources told Reuters.
President Christine Lagarde said after the meeting that the ECB would “recalibrate” its policy in December to contain the growing fallout from a second wave of coronavirus infections, but she would not be drawn from what that meant in practice.
Two sources told Reuters that some policymakers were in favor of expanding the ECB’s Emergency Pandemic Purchase Program (PEPP), which has used up nearly half of its firepower of 1, 35 trillion euros ($ 1.60 trillion).
Others put more emphasis on even more generous credit for banks under the ECB’s Longer-Term Targeted Refinancing Operations (TLTROs), while others still wanted a package that included both, the sources said.
Although no specific proposal was discussed, one of the sources said the discussion de facto prepositioned the December meeting.
One of the open questions concerns the make-up of the PEPP and how to adapt it to the current environment, one of the sources said.
As part of this program, the ECB purchased government, corporate and covered bonds as well as commercial paper.
The sources added that policymakers in the South expressed greater concern about the prospects while policymakers in the North urged patience.
An ECB spokesperson declined to comment.
Reporting by Frank Siebelt, Francesco Canepa and Balazs Koranyi