Talk Continues About Draghi’s Options

With just a day to go before the European Central Bank’s (ECB) hotly anticipated policy meeting, there’s a lot of talk about President Mario Draghi’s options to help revive the moribund euro zone economy.

After the central bank has cut rates and unveiled ultra-cheap long-term loans, many believe Draghi is running out of options to tackle slowing price rises and stubbornly low bank lending. One of the most discussed – and controversial – stimulus measures is some form of bond-buying program.

Now – following comments by Draghi at Jackson Hole in late August – expectations of some sort of quantitative easing (QE) program have been heightened.  But it’s not quite as simple as that. There’s two types of bond-buying available – but which is which and which is the most likely?

CNBC

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