BRUSSELS (Reuters) – The European Central Bank is capping its weekly bond purchases at 20 billion euros and euro zone officials hope its new bumper liquidity provision will allow banks to buy more government debt and ease crisis-hit states’ borrowing costs, ECB sources said on Friday.
The bank has bought no more than 22 billion euros worth of bonds in any week since it reactivated its bond-buy program in August. ECB sources said it would keep purchases to a maximum of 20 billion euros now and is not considering bigger action in response to an EU summit decision to create a fiscal union.
Twenty-three of the EU’s 27 leaders agreed to pursue tighter integration with stricter budget rules for the euro zone, though Britain said it could not accept proposed amendments to the EU treaty after failing to secure concessions for itself.
“We more or less anticipated what would come out,” one ECB source said. “We don’t see any need for new deliberation.”
The ECB bond-buy cap would remain at the level set weekly for the last few weeks by the Governing Council, a second source said. Weekly purchases have not topped 10 billion euros since September, less than half the limit.