ECB signs up BlackRock to advise on bond buying
The European Central Bank has stepped up preparations for a fresh move to combat deflation by appointing BlackRock to advise on a possible bond-buying scheme.
The advisory arm of the US asset manager, BlackRock Solutions, will help the ECB to design a programme to buy asset-backed securities as part of the regulator’s plans to ease credit conditions in the eurozone.
Mario Draghi, ECB president, said last week that the bank was “fast moving forward” with preparations to buy asset-backed securities, in which banks take loan revenues from assets such as mortgages or credit cards and bundle them up for sale to fixed-income investors.
The ECB president suggested in Davos in January that the central bank could buy packages of bank loans to households and companies as one way of fighting deflation.
The ECB’s governing council has not yet decided whether it will go ahead with an ABS-purchase scheme. A spokesperson said the execution of the programme would remain the responsibility of the central bank and that safeguards against any conflict of interest at BlackRock were in place.
The move comes days after Mr Draghi used his speech at the annual US central banker summit in Jackson Hole to warn about low inflation in the eurozone.
His remarks sparked a rally in European equities and a fall in government borrowing costs this week.
Source: ft
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