ECB Said to Study New Bond-Buying Plan

The transcript discusses the European Central Bank's (ECB) pandemic emergency purchase program (PEP) and the concerns of policymakers about the potential widening of spreads when large-scale asset purchases stop. The PEP, a crisis tool, is set to end in March, and there is a need to assure investors of market stability. The ECB is exploring options to transition the program into a new form, as the current program has achieved its goal of stabilizing inflation. The focus is now on moving beyond crisis measures and maintaining inflation at 2%.

What is the main concern of policymakers regarding the end of the PEPP?

• The rise in unemployment

• The increase in inflation rates

• The decrease in asset purchases

• The widening of spreads

Why is the ECB considering transforming the pandemic program?

• To give it a new name and purpose

• To adapt to changing market conditions

• To maintain its crisis tool indefinitely

• To address new economic challenges

What was the primary goal of the PEPP?

• To restore economic and inflation trends

• To increase interest rates

• To stabilize the stock market

• To reduce government debt

What is the ECB's target inflation rate as they move beyond the crisis?

• 2%

• 4%

• 1%

• 3%

Why can't crisis instruments be extended indefinitely according to the ECB?

• They are only meant for short-term use

• They become less effective over time

• They are too costly to maintain

• They conflict with long-term economic goals