4 Mar 2015
ECB: Technical logistics challenges ahead - BBH
FXStreet (Guatemala) - Analysts at Brown Brothers Harriman explained that there are many technical and logistic challenges to the execution of the ECB's new asset purchase scheme.
Key Quotes:
"The national central banks will be doing the bulk of the purchasing and the risk for most of the purchases will not be pooled. It is not clear whether theECB or the national central banks will lend the bonds that are purchased back to the market, or the terms if it does."
"It is not yet clear precisely how the bonds will be purchased. The Federal Reserve did so through reverse auctions, but the Eurosystem appears to be more inclined to go directly to the trading platforms and market makers. However, the technical and logistic challenges seem to be modest compared to the operational risks."
Key Quotes:
"The national central banks will be doing the bulk of the purchasing and the risk for most of the purchases will not be pooled. It is not clear whether theECB or the national central banks will lend the bonds that are purchased back to the market, or the terms if it does."
"It is not yet clear precisely how the bonds will be purchased. The Federal Reserve did so through reverse auctions, but the Eurosystem appears to be more inclined to go directly to the trading platforms and market makers. However, the technical and logistic challenges seem to be modest compared to the operational risks."