ECB under attack over QE

The ECB’s €2.3 trillion worth of asset buys propped up growth but failed to boost inflation and may have actually increased risks to financial stability, research published by the Bundesbank has shown.

The conclusions of the paper support the long held views of the German central bank that bond purchases, commonly known as quantitative easing (QE), were unnecessary and should be phased out without delay, ending the ECB’s biggest foray yet into unconventional monetary policy.

“We find that ECB balance sheet policies, in the form of direct asset purchases, bring down financial stress for some periods after the shock,” the paper concluded.