ECB: €1 trillion securities can be bought

European Central Bank vice-president Vitor Constancio said €1 trillion of asset-backed securities (ABS) and covered bonds are eligible for purchase by the institution.

“The overall purchasable amount of asset-backed securities and covered bonds is sufficient to ensure that asset purchases can be carried out on a large scale,” Constancio said in Frankfurt yesterday. “We are aware that the amounts that we will be able to buy will be lower than the theoretical amount.”

Asset purchases are the latest addition to the ECB’s medley of unconventional tools that also includes targeted long-term loans and a negative deposit rate. The central bank, struggling with low inflation and an economy that stagnated in the second quarter, unveiled details of the plan last week and said it plans to start buying this month.