ECB Bond Purchasing Decision Draws Debate among Bank Officials

ECB Bond Purchasing Decision Draws Debate among Bank Officials

A hot debate among the European bank officials is indicating that the policy-makers should hold back a crucial program which is intended to turn round the falling in the Eurozone.

For weeks now, the top officials of banks have considered the decision whether the "quantitative easing" policy should be adopted or not. The approach involves acquisition of huge quantities of Eurozone government bonds which in turn will help in lowering the interest rate which will be beneficial for stimulating different economic activities. The Eurozone which includes nineteen members has been struggling to counter the menace of deflation as the consumer prices dropped by 0.2 percent in the region, in December. It was the very first price turn down which was noted in the last five years.

It is expected that the ECB or the European Central Bank will be announcing a quantitative easing program following its meeting that is scheduled on January 22.

The ECB has already cut down the standard interest rate to 0.05 percent. That leaves the bond-buying policy as the only reasonable alternative which will push the inflation upwards. However, the top members of the bank have expressed different kind of views in this regard in separate interviews.