As widely expected Draghi yesterday outlined the framework by which the European Central Bank (ECB) will make purchases of Euro-zone sovereign bonds in the secondary market. The new programme to be known as “Outright Monetary Transactions” (OMT) will replace the previous Securities Markets Programme (SMP). Under the SMP the ECB purchased €211bn of peripheral sovereign bonds. Purchases were “sterilised” by the ECB issuing short-term bonds to commercial banks. No new money was created as the ECB…
‘Is the OMT just the pari-passu SMP?’
07 Sep 2012
Posted by Barry Norris