ECB QE programme ‘won’t distort market’

European Central Bank executive board member Benoit Coeure said bond purchases under the bank’s quantitative easing programme will aim to match the existing maturity profile of the market.

“In terms of the maturity allocation within a given sovereign bond universe, it will be broadly based on market outstandings,” Mr Coeure told reporters at an event in Budapest yesterday. “There is very little leeway for discussion or readjustment,” and “we want to create as little market distortion as possible,” he said.

ECB president Mario Draghi surprised economists and investors in January with a €1.1 trillion bond-purchase plan that was twice as big as forecast, although many details about its execution remain unknown. The ECB has only said it will buy bonds with maturities between two and 30 years, determine purchase amounts based on the size of individual economies, and set limits on how much of each country’s debt can be acquired.