ECB President Mario Draghi finally announced the highly anticipated government bond buying program for the Eurozone. The central bank committee opted for a larger package, consisting of E60 billion purchases per month for two years while keeping the size of risk sharing low – 20% share by the ECB, 80% by NCBs. The council also announced no changes in their main deposit rate which will remain at 0.05% while banks will still be charged 0.2% to hold reserves at the ECB. In addition to the monetary policy announcement, Mr. Draghi called for structural reforms by the members of the monetary union in efforts to “grow investments today for a sustainable economic growth in the future.”
Equity markets in Europe have welcomed the announcement with a decisive jump while the Euro and bond yields – particularly in Spain and Italy – are sliding fast to newer lows.