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Purchase of government bonds by the ECB: How should the open market policy of the European Central Bank be assessed?

Author

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  • Markus Kerber
  • Martin Mandler
  • Peter Tillmann

Abstract

Since May 2010 the European Central Bank has been making direct purchases of public and private bonds on the secondary market. Markus C. Kerber, Technical University of Berlin, argues that this new open market policy of the ECB - the purchasing of government bonds on the secondary market - is in fact not permissible and damages the stability of the euro zone. In the opinion of Martin Mandler and Peter Tillmann, University of Gießen, this policy of the ECB is a potential transfer of resources to the crisis states and their creditors that in principle is not one of the tasks of monetary policy; there are alternatives to this programme in its current form. Against the background of the "unconventional" monetary policies of central banks throughout the world, a different approach could reduce the risks of such transfers.

Suggested Citation

  • Markus Kerber & Martin Mandler & Peter Tillmann, 2010. "Purchase of government bonds by the ECB: How should the open market policy of the European Central Bank be assessed?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 63(21), pages 03-10, November.
    • Handle: RePEc:ces:ifosdt:v:63:y:2010:i:21:p:03-10
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    Cited by:

    1. Andreas Nastansky & Sarah Siris, 2024. "Risikoverbund zwischen Banken und Staaten: Eine empirische Analyse für den Euroraum," Statistische Diskussionsbeiträge 56, Universität Potsdam, Wirtschafts- und Sozialwissenschaftliche Fakultät.

    More about this item

    JEL classification:

    • G00 - Financial Economics - - General - - - General
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General

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