It’s a simple principle of finance: To be a buyer, you need a willing seller.
The European Central Bank in March will become a buyer in a big way. Its president, Mario Draghi, in January announced the ECB will next month start buying €60 billion per month in government bonds and other assets from investors. It plans to continue the program, known as quantitative easing, until at least September 2016 – a total of €1.14 trillion.
The announcement heralded a revolution in European monetary policy – a last-gasp effort by the ECB to prevent Europe from plunging into a dangerous deflationary spiral and to speed up its economic recovery.
But for the ECB’s bond-buying program – known as quantitative easing – to work, it needs willing sellers.