ECB debated bigger cut in bond buys in Sept, account shows – Reuters

FRANKFURT, Oct 7 (Reuters) – European Central Bank policymakers debated a bigger cut in asset purchases last month and some even argued that markets may have already prepared for the end of emergency support, the accounts of their Sept 9 meeting showed on Thursday.

“It was argued that a symmetric application of the (Pandemic Emergency Purchase Programme) framework would call for a more substantial reduction in the pace of purchases,” the ECB said. “From this perspective, a pace of purchases similar to the level prevailing at the beginning of the year would be appropriate.”

In the end, policymakers agreed to just “moderately” reduce asset buys, while insisting that this was not “tapering” as weak price pressures still required support.

But that agreement came even as some conservative policymakers suggested markets have already prepared for the end of emergency purchases without too a significant impact on financing conditions.

“The argument was made that markets were already expecting an end to net asset purchases under the PEPP by March 2022,” the accounts showed. “The point was made that, even without the PEPP, the overall monetary policy stance remained highly accommodative.” (Reporting by Balazs Koranyi Editing by Francesco Canepa)

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