(Finance) – The ECB is preparing to start the debate about the reduction of its budget in October. This is what the Financial Times writes about the securities purchased in recent years with the various emergency and quantitative easing plans, at whose expiry the central bank still continues to reinvest the capital deriving from the securities which have reached maturity.
The board of directors he repeatedly assured that he would continue to repurchase securities that have matured for a certain period time after the first rate hike. And again yesterday, during the press conference following the monetary policy meeting, the President Lagarde he defined a debate to this effect is premature and he assured us that there was no mention at all of the reduction of the budget.
But apparently the times are now ripe and the time horizon is shortening, because the British newspaper, citing anonymous sources involved in the discussions, indicates the date of 5 October for the start of discussions in this regard, when the Non-Monetary Governing Council will meet in Cyprus.
On that occasion – writes the British newspaper – there will be no press conferences e there will be no announcementwhile the first useful opportunity it could be the Monetary Council of 27 October. The start of operations could then materialize in the first quarter of 2023.
If the ECB reduced the amount of securities in the portfoliojust like the Fed and the Bank of England are doing, the odds are financing costs will increase long-term eurozone governments, as yields have already recently reached the highs of the last eight years. A big problem especially for the Debt countries like Italybecause it would increase spreads and interest charges on debt, but Frankfurt can no longer wait and must take more resolute action against inflation, the common enemy of central banks.