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ECB asset purchases ‘having an impact’

The impact of asset purchases by the European Central Bank is visible in the euro-area economy, according to Governing Council member Erkki Liikanen.

“Monetary-policy decisions and the measures taken have already had a clear, positive impact on the economic outlook” said Liikanen, who also heads the Helsinki-based Bank of Finland, yesterday.

“The ECB is committed to delivering on its primary mandate: price stability,” he said.

Sovereign-bond purchases by the Frankfurt-based central bank started this month as it seeks to jolt the 19-member euro area toward faster price growth. The ECB has pledged to spend €60bn a month on government debt, covered bonds and asset-backed securities for a total of more than €1.1trn.

“The large-scale asset purchases will be carried out at least until end-September 2016 and in any case until the Governing Council judges the pace of inflation is returning sustainably to a level in line with the price-stability objective,” Liikanen said.

“We are committed to that resolutely and without doubt,” he said. In the first two weeks of the program, the ECB settled €26.3bn of public-sector bond purchases.

“If quantitative easing was a marathon, we’ve now run 1km and we have 41km left to go,” Liikanen said. “That’s why a steady, calm, determined pace is extremely important,” he said.

While inflation won’t reach the ECB’s goal of just below 2% until 2017 with consumer prices falling 0.3% in February, ECB president Mario Draghi has said that a sustained recovery is taking hold.

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