Mr Draghi, will you make changes to the QE restrictions? – Danske Bank

Research Team at Danske Bank, suggests that a potential QE extension together with lower government bond yields, which imply a large share of bonds is excluded from QE purchases, has raised speculation about changing the QE restrictions.

Key Quotes

“Mario Draghi is very likely to be confronted by the scarcity issue but we expect a patient stance and no changes in QE restrictions in line with our view that the ECB will keep its powder dry. A possibility is that the ECB will create a ‘task force’ to look at the issue.

The ECB minutes from the July meeting concluded that ‘implementation of the asset purchase programme had proceeded smoothly, notwithstanding market reports of emerging scarcity in some market segments’.”