FRANKFURT (Reuters) - The European Central Bank may not need to buy any government debt with its new bond-buying program, ECB policymaker Panicos Demetriades said in an interview with Bloomberg published on Thursday, just a week after the bank agreed the plan.
The ECB agreed last Thursday to launch the new and potentially unlimited bond-buying program to lower struggling euro zone countries’ borrowing costs and draw a line under the debt crisis.
The threat of unlimited buying may mean that “in the end, action is not needed,” Demetriades told Bloomberg in an interview conducted on Wednesday.
“No one will speculate against the unlimited firepower of a central bank. This is what stabilizes currencies of countries where investors know that. One wouldn’t gamble against the Federal Reserve, for example.”
Reporting By Sakari Suoninen