ECB: QE is on the cards early next year

The European Central Bank will next quarter consider buying sovereign debt in relation to the size of each euro member’s economy if current stimulus proves insufficient, vice president Vitor Constancio said.

“We expect that the adopted measures will lead, within the time of the programme, the balance sheet to go back to the size it had in early 2012,” Constancio said in a speech in London. “If not, we will have to consider buying other assets, including sovereign bonds in the secondary market, the bulkier and more liquid market of securities available. It would be a pure monetary policy decision, buying according to our capital key, within our mandate and our legal competence.”

The comments underline the ECB’s desire to be ready to add more stimulus if needed, with president Mario Draghi last week vowing to revive inflation “as fast as possible.”