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| Version 3 | Version 4 |
|---|---|
| ECB to start asset buying programme | ECB to start asset buying programme |
| (about 1 hour later) | |
| The European Central Bank has kept its benchmark interest rate at 0.05% and given details of its asset purchase programme announced last month. | The European Central Bank has kept its benchmark interest rate at 0.05% and given details of its asset purchase programme announced last month. |
| The bank's head Mario Draghi said it would start buying covered bonds this month and other assets in the final three months of the year. | The bank's head Mario Draghi said it would start buying covered bonds this month and other assets in the final three months of the year. |
| He said it would continue to buy assets for two years. | He said it would continue to buy assets for two years. |
| The bank is looking to add liquidity to the financial system, boost lending and lift flagging economic growth. | The bank is looking to add liquidity to the financial system, boost lending and lift flagging economic growth. |
| Covered bonds are those backed by public sector loans or mortgages. | Covered bonds are those backed by public sector loans or mortgages. |
| The bank's rate-setting meeting is taking place in Naples, Italy, where protesters have faced riot police outside the Capodimonti Palace, where Mr Draghi is held his press conference. | The bank's rate-setting meeting is taking place in Naples, Italy, where protesters have faced riot police outside the Capodimonti Palace, where Mr Draghi is held his press conference. |
| Protesters expressed anger about austerity measures, unemployment and poverty. | Protesters expressed anger about austerity measures, unemployment and poverty. |
| 'Unconventional instruments' | 'Unconventional instruments' |
| Mr Draghi did not say how much the bank would spend on buying assets, just that the programme would have a "sizeable impact on the bank's balance sheet" and would support specific market sectors. | Mr Draghi did not say how much the bank would spend on buying assets, just that the programme would have a "sizeable impact on the bank's balance sheet" and would support specific market sectors. |
| The bank had already said it would not be buying government bonds like other central banks have done. | The bank had already said it would not be buying government bonds like other central banks have done. |
| Mr Draghi said the programme "should ease the monetary policy stance" of the bank. | Mr Draghi said the programme "should ease the monetary policy stance" of the bank. |
| He said the bank was "committed to using additional unconventional instruments" in the future should inflation remain low for too long. | He said the bank was "committed to using additional unconventional instruments" in the future should inflation remain low for too long. |
| Weak outlook | Weak outlook |
| Consumer price inflation in the eurozone fell to 0.3% in September, its lowest rate for almost five years and well below the ECB's target of close to, but below, 2%. | Consumer price inflation in the eurozone fell to 0.3% in September, its lowest rate for almost five years and well below the ECB's target of close to, but below, 2%. |
| The eurozone economy was stagnant between April and June this year, with the German and Italian economies shrinking, following growth of just 0.2% in the first quarter. | The eurozone economy was stagnant between April and June this year, with the German and Italian economies shrinking, following growth of just 0.2% in the first quarter. |
| Mr Draghi suggested the chances of a strong turnaround in the region's economy were slim. | Mr Draghi suggested the chances of a strong turnaround in the region's economy were slim. |
| "The recovery is likely to continue to be dampened by high unemployment, sizeable unutilised capacity and continued negative bank loan growth to the private sector. | "The recovery is likely to continue to be dampened by high unemployment, sizeable unutilised capacity and continued negative bank loan growth to the private sector. |
| "In particular, the recent weakening in the euro area's growth momentum, alongside heightened geopolitical risk, could dampen confidence and, in particular, private investment." | "In particular, the recent weakening in the euro area's growth momentum, alongside heightened geopolitical risk, could dampen confidence and, in particular, private investment." |
| Analysis: Andrew Walker, economics correspondent, BBC News | |
| Is it quantitative easing? In a sense yes, in that the ECB is going to buy financial assets with newly created money. But it differs from American, British and Japanese QE in some important aspects. | |
| One is scale, or at least it probably is. A Reuters survey of traders showed expectations that the ECB will buy $200bn worth of these assets over a year. That is small scale compared to what the US Fed was doing | |
| Then there is the fact that the ECB programme has a more narrowly focussed purpose: to loosen a specific bunged up market. | |
| There's also the fact that the major QE programmes have involved buying government debt. The ECB has done a modest amount of that in the past, but it's not included in this exercise. It might, however, be on the way. |