The European Central Bank has passed the €1tn mark for its controversial purchases of government bonds, putting pressure on policymakers to address the scarcity of available bonds when they meet in Frankfurt this week.
A global collapse in eurozone bond yields since Britain’s vote to exit the EU has dramatically reduced the stock of eurozone government paper standing above the yield threshold set for the ECB’s €1.7tn bond-buying project — raising concerns that the ECB will have to make sweeping changes to avoid running out of bonds to buy.
The bond purchases are part of a quantitative easing programme — like those of Japan and the UK — launched to fight the threat of deflation and boost the flagging eurozone economy by driving down borrowing costs for companies and lifting confidence.