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Disinflation is a huge concern and with the main objective of the European Central Bank being that of price stability, Mario Draghi is beginning to run out of options.
The ECB aims to expand its balance through a combination of asset-backed security purchases and covered bonds, and it is hugely important that banks avail of this scheme.
The programme alongside planned purchases of asset-backed securities and covered bonds has the aim of expanding the ECB’s balance sheet closer to the €3 trillion level, where it was in 2012. It’s now around €2 trillion.
The total maximum volume is around €400 billion and six more loan allotments will take place during 2016.