26 November 2018 / Europe
ECB must address QE misallocation risk
By the end of this year, the European Central Bank is expected to end its monthly net asset purchases. This raises several questions about the ECB's reinvestment strategy and the implications for individual countries. The central bank's quantitative easing programme was not as successful as believed. The real issue for the ECB governing council to address when discussing fiscal implications of reinvestment is the risk arising from the misallocation of liquidity and corresponding claims and liabilities.