Orphanides Says Fund Could Buy Bonds Instead of ECB

[dkf]

http://www.bloomberg.com/news/2011-01-17/orphanides-says-ecb-could-stop-bond-purchases-if-europe-aid-fund-took-role.html

European Central Bank council member Athanasios Orphanides said the bank may be able to stop buying government bonds if Europe’s rescue fund is empowered to purchase debt.

The ECB initiated its bond program “to address market dysfunction that hampered the monetary transmission mechanism,” Orphanides said in a Jan. 14 interview in Frankfurt, a day after ECB policy makers met. If the European Financial Stability Facility “were to buy government bonds, and that improved the functioning of the monetary policy transmission mechanism, that might render some of the ECB’s non-standard measures no longer necessary,” he said.