December 14, 2010
The European Central Bank and national central banks in the euro zone stepped up purchases of euro-zone government bonds last week but the total amount fell short of expectations, underlining the ECB's reluctance to vastly expand support for the bond market.
ECB said Monday that the Eurosystem settled €2.67 billion ($3.53 billion) of bond purchases last week, up from €1.97 billion the previous week. Central bank watchers and investors had expected a sum larger than €5 billion.
"This highlights the ECB's underlying discomfort with the bond-purchasing program," said Martin van Vliet, an economist at ING Bank.
The ECB doesn't break down the debt-purchase figures by country or maturity, but bond dealers say that the ECB bought Greek, Irish and Portuguese government debt. The ECB said that as a consequence of its purchases it will drain €72 billion from the market at its weekly auction of one-week deposits on Tuesday.
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