Will Draghi be carrying a bazooka, or a peashooter? Stefano Pozzebon/BI The European Central Bank (ECB) held rates steady and announced a huge quantitative easing (QE) programme in which it will buy bonds worth €60 billion each month until the end of September 2016, in its monetary policy meeting on Thursday.



Pretty much everyone was expecting some sort of big stimulus package.

Here are the highlights from the press conference as well as ECB president Mario Draghi's full statement:

Draghi just announced "expanded asset purchases" — quantitative easing (QE).

The ECB will purchase €60 billion of assets per month — that combines the purchases of covered bonds and asset-backed securities they were already doing with investment-grade government debt. This is more than people expected.



Greek debt isn't investment-grade, but the statement says there's "some additional eligibility criteria" for countries currently in bailout programmes, so Greece's bonds may still be eligible for the new scheme. Here are some of the technical details.

Purchases are expected to run until the end of September 2016. Crucially, if the job of raising inflation back toward the ECB's target isn't done by then, the programme can keep rolling on.

12% of the new purchases will be subject to "loss-sharing" — the ECB will hold another 8% of the bonds, so a fifth of the risk will be shared in total. But that means most of the default risk will be held by national central banks.

The ECB won't buy more than 25% of the new debt any country is issuing, and not more than 33% of its outstanding total debt. It will buy bonds with maturities between two and 30 years, longer than people were expecting. It will buy bonds with negative yields, too.

Draghi says a "large majority" of the ECB board was in favour of the QE package. Enough that it didn't take a vote, but it doesn't sound unanimous.

It looks as if this was more than the market had priced in: the euro is sinking against the dollar. Government bond yields across the eurozone are plunging to record low levels.

Draghi says there is "continued moderate growth" and that lower oil prices will help disposable incomes in Europe. But he adds that high unemployment is going to keep weighing on the eurozone. The ECB is expecting inflation to increase gradually later in 2015 and through 2016, and countries should use any "available scope" in fiscal policy to boost the recovery (he's talking to you, Germany).

Analysts were betting on a quantitative easing scheme worth about €500 billion ($580.95 billion) to €600 billion. Anything smaller would have been a negative surprise for markets are would probably have sparked a nasty reaction.

Pretty much every leak and official comment from the ECB in the last couple of months has been leading up to this. ECB press chief Michael Steen notes that the ECB has 13 camera crews in Thursday, as opposed to the usual two to three.

The eurozone officially dropped into deflation in December, with consumer prices falling 0.2%, the first negative figure since 2009. It is likely to be falling further and further in the months ahead, with plunging oil prices driving the index down.

Whatever happens, this will be one of the most important ECB meetings since the worst days of the euro crisis in 2012.



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