ECB December Meeting Update - 5th December 2014

Dec. 5, 2014 - PRLog -- Capetian Asset Management is a world-wide private equity firm with the resources and expertise to source, evaluate, and manage private investments globally in both developed and developing markets and across many industrial and commercial sectors.

ECB December Meeting Update - 5th December 2014

The European Central Bank met in Frankfurt yesterday for their December meeting.

Comments made after the November meeting suggested that the head of the ECB, Mario Draghi could have been close to announcing his intentions for QE within the Eurozone in this month's meeting.

In actual fact, all that was really gleaned from the press conference after the meeting was that nothing would be instigated until early next year.

It was confirmed that the central bank was looking to start purchasing sovereign debt early next year. The bank has been buying private sector bonds for the past few months but this has not had a significant impact to the EU economies.

With interest rates being held at 0.5% and the EU growing at just 0.2% in the third quarter the stagnation being seen in Europe is still prevalent and in focus. Inflation fell in November to just 0.3% from Octobers 0.4% and this is seen as a key reason as to why the ECB is looking to implement QE just like the US has just exited.

One of the main reasons for the delay in moving forward with his plan is the current feeling within the German government that state bonds, ie government debt is not the best way forward as it is very difficult to establish which government debts or bonds would be secured by the European Central Bank.

The Bundesbank head has stated he believes this moves could go against European Union laws, to this Mr. Draghi said that it would be illegal of him not to pursue any avenue available to him to quell the stagnation and even recession in the EU.

The markets have not reacted too positively to the announcement and European markets are expected to open lower.

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