Withstanding the pressure

Stefan Holzberger, EMEA, AM Best

The European Central Bank (ECB) unveiled a large-scale sovereign bond buying programme on January 22 in an effort to combat stagnation and ultra-low inflation in the eurozone. The ECB will begin its stimulus programme in March and buy $70bn of public and private sector assets each month until September 2016. It is hoped that additional liquidity will spur an increase in credit to the real economy, maintain historically low interest rates and help to bring the inflation rate back toward the ECB’s target of just below 2%. Inflation is estimated to have been -0.6% in January for the eurozone area.