Azernews.Az

By Bloomberg

European Central Bank policy makers judged that buying government debt was the only adequate option open to them when they debated a quantitative-easing program last month, an official account of the meeting shows.

The Governing Council decided at its Jan. 22 meeting to start a 1.1 trillion-euro ($1.3 trillion) asset-buying plan because existing programs “would fall short in quantitative terms,” according to the 18-page summary, the first time the ECB has published such a document. “Purchases of sovereign debt appeared to be the only remaining instrument of sufficient scope to provide the necessary monetary stimulus.”

Led by President Mario Draghi, the ECB is releasing summaries of its monetary-policy meetings in a revamp of its communications strategy. The approach carries risks for a central bank that requires policy makers to act on behalf of the entire 19-nation currency bloc rather than just their own states.

The ECB has avoided revealing the views of governors so that they don’t come under political pressure from their home nations that could influence their decision-making. While the new summaries don’t attribute views to individuals, they still threaten to harden the stances of members from widely diverse economies.

Germany led opposition to QE. Those arguments are represented in detail throughout the document, starting with the view that no monetary policy action was needed.

“A number of considerations in favor of maintaining a wait-and-see stance at the current meeting were advanced by some members,” according to the report. “Purchases of sovereign bonds should remain a contingency instrument of monetary policy, to be used only as a last resort in the event of an extremely adverse scenario.”