ECB hasn't seriously discussed stimulus 'Plan B': council member
The European Central Bank has not "seriously" discussed a purchase of corporate bonds as another way of pumping cash into the stalling eurozone economy, a member of the bank's decision-making body said on Wednesday.
"We could extend our measures to other instruments such as corporate bonds," said Luc Coene, who as head of the National Bank of Belgium sits on the ECB's governing council.
"We're not yet discussing it seriously. But it is an element that has been mentioned by some," Coene told the economic daily newspapers L'Echo and Tijd.
Nevertheless, "there is no concrete proposal on the table at the moment," he added.
A media report that the ECB is considering buying corporate bonds as a new way of pumping cash into the eurozone economy sparked a rally in global stock markets and weakened the euro on Tuesday.
Policymakers are desperate to revive its stalling growth, and the ECB has already launched a programme to purchase covered bonds issued by banks and is preparing a similar one to buy asset-backed securities.
Both schemes are aimed at unclogging the flow of credit in the eurozone, which has seized up as a result of the financial crisis, but is vital to getting the region's economy back on its feet.
A spokesman for the ECB in Frankfurt also said that the central bank's governing council "has taken no such decision" on buying corporate bonds.
A broad programme of purchasing sovereign bonds, known as "quantitative easing", as practised by other central banks, has also been considered.
But Germany, the eurozone's economic powerhouse and effective paymaster, objects to it because it sees it as a way of printing money to pay a country's debt.
Inflation in the euro area is currently alarmingly low, threatening to pull the region into a downward spiral of falling prices known as deflation.
ECB president Mario Draghi has repeatedly pledged to everything in its power to avert deflation including so-called "unconventional" policy measures such as the bond purchase programmes.
The aim is to boost the amount of liquidity in the eurozone economy by increasing the central bank's balance sheet by an estimated one trillion euros ($1.3 trillion).
But "if we want to attain the volumes we have in our heads, we could end up paying high prices," for the debt, Coene told the Belgian newspapers.
© 2014 AFP