ECB credit easing policies will be sizeable: Praet

Fri Oct 3, 2014 11:13am EDT
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By Philip Blenkinsop

BRUSSELS Oct 3 (Reuters) - The European Central Bank's programs of loans and debt purchases to ease the flow of credit will be sizeable, although giving a precise figure is difficult, European Central Bank Executive Board member Peter Praet said on Friday.

The ECB on Thursday laid out plans to buy packages of debt known as asset-backed securities as well as covered bonds, which are secured on solid assets, such as property.

That comes on top of ultra-low interest rates and up to 400 million euros ($501 million) of cheap four-year loans, known as

a Targeted Long-Term Refinancing Operation, or TLTROs. A second tranche of TLTROs in December is expected to attract better

demand than the first in September.

"The ECB Governing Council has clearly communicated that its credit-easing policy will have a sizeable impact on its balance sheet," Praet said at a conference at ULB university in Brussels.

"Sizeable volumes to address credit impairment are important, as indicated by the universe of purchasable assets," he said.

The scheme will start in mid-October for covered bonds. Purchases of asset-backed securities will follow before the end of the year.   Continued...

European Central Bank Executive Board member Peter Praet gives a speech during a meeting organised by the Grand Conferences Catholiques in Brussels January 14, 2013.  REUTERS/Eric Vidal