Eurasia Review:
A safe asset for Eurozone QE: A proposal
15 November 2014
The ECB seems to be edging towards QE, but faces a quandary on what to buy. This proposal suggests that the ECB buy 'Safe Market Bonds'. These would be synthetic bonds formed by the senior tranches of EZ national bonds combined in GDP-weighted proportions. The ECB would merely announce the features of the synthetic bonds it will purchase. The market would create the bonds in response to this announcement, thus avoiding new EZ-level institutions or funds.
This article was published online by Eurasia Review on November 15, 2014
Link to article here
Related links
Luis Garicano webpage
Productivity and Innovation Programme webpage
Luis Garicano CEP publications webpage