The quantative easing being introduced by the European central bank poses little risk to euro countries, Dutch central bank president Klaas Knot said on Thursday.
‘The ECB has sufficient buffers,’Knot told website nu.nl. ‘The national central banks carry a 92% risk on national state bonds. The other 8% is for the ECB.’
Any losses with the ECB share will be shared. The risk is with state bonds of countries with a high credit rating but, says Knot, the risk is ‘negligable’.
The ECB is to buy €60bn worth of euro state and company bonds each month from euro countries, to a value of €1,100bn.
The bank president also told nu.nl he expects quantative easing to lead to an rise in European inflation of half a percentage point in 2016.
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