Shares rally as ECB considers corporate bonds

The European Central Bank is considering buying corporate bonds on the secondary market and may decide on the matter as soon as December, with a view to begin purchases early next year, several sources familiar with the situation have told Reuters.

European shares rallied on the news, led by banks and shares in peripheral countries. The euro fell more than half a cent against the dollar and credit indices tightened sharply. Policymakers are desperate to revive the eurozone economy, which is barely growing and dogged by low inflation of 0.3%, far below the ECB’s target of just below 2%.

The ECB has already carried out work on corporate bond buying, which would widen out the private-sector asset-buying programme it began on Monday. It is hoping these measures will foster lending to businesses and thereby support the eurozone economy.