Under the asset purchasing programme the central bank buys bonds in order to keep the long-term cost of borrowing down.
Crucially, the European Central Bank is to start buying bonds - government debt - something the European Central Bank said it would never do when it was established.
In a normally functioning economy, when the central bank buys government bonds, it injects money into the banking system where it will be lent out, facilitating growth.
Prime Ministers Mario Monti and Mariano Rajoy had both urged the European Central Bank to buy bonds of eurozone countries to help governments manage unsustainable levels of interest on debt.
So the expectation is that the central bank will buy government bonds of Spain and Italy.
To soak up the unwanted currency, the central bank has to sell bonds.
The boost came from expectations and then further monetary easing from the U.S. Federal Reserve, as well as plans by the European Central Bank and Bank of Japan to buy more bonds.
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Since then, the public debate has gone quiet around this idea, partly because promises by the European Central Bank to buy government bonds have taken some of the urgency out of initiatives to overhaul the euro zone.
Gold could keep rallying for a while, Lesh said, although he also anticipates a bout of profit taking at some point now that a highly anticipated FOMC meeting and European Central Bank willingness to buy bonds have both occurred.
On this score, reality is dawning on policy makers: Last week, Bank of England Governor Mervyn King, the high priest of the global regulatory onslaught, called for a rethink of the Basel liquidity rules that have led banks to hoard cash in ultra-low-yielding central bank reserves and government bonds.
When a central bank such as the Bank of England buys government bonds as part of quantitative easing, it does NOT sterilise the purchases, because the whole point of QE is to get more money into the system.
Policymakers will reportedly look at longer maturities and the amount of government bonds the central bank can buy.
In anticipation of big central-bank purchases of government bonds, traders sent benchmark Japanese government-bond futures up to a record Friday.
Even if that understates the real picture, it suggests a sharp drop in central-bank purchases of American bonds compared with 2004.
And fourth, the European Central Bank would take losses on its reserves of Irish bank bonds and those that it is holding as collateral.
We still do not know how aggressive the European Central Bank will be in buying bonds, and so lowering the borrowing costs of troubled countries.
Fiscal discipline makes it easier for the European Central Bank to step in and buy bonds.
Many want the European Central Bank to buy as many sovereign bonds as it takes to calm markets.
On rumors that the European Central Bank (ECB) would sell bonds, gold spiked.
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Money continues to leave the country and the Central Bank has struggled to sell its bonds in its domestic markets.
The Central Bank of Ireland will sell the bonds but only where such a sale is not disruptive to financial stability.
Given that the European Central Bank has been mopping up Greek bonds it perhaps no wonder that the haircuts are not stringent enough!
Anyway, for one reason or another, it was decided to scrap the IBRC altogether and provide replacement bonds to the Central Bank of Ireland.
The implication is that the European Central Bank should stand behind Spanish government bonds in order to prevent a bail-out, and that Mrs Merkel should publicly back Spain.
The European Central Bank recently bought Portuguese and Irish bonds, but forgot to buy the similarly imperiled Spanish and Italian bonds and then raised rates, making the situation much worse.
And because, unlike the previous ECB bond buying programme, the bonds that the central bank buys will not get special treatment in the event of any debt write-downs, as happened in Greece.
At the same time, the European Central Bank agreed to exchange Greek government bonds it bought on the secondary market for less than their face value, provided the debt-restructuring talks succeed, according to people briefed on the negotiations.
The US Treasury pays the Federal Reserve interest on the US Treasury bonds that the central bank has bought on the open market as part of its quantitative easing, but the Fed always sends that money right back again.
Banks can present any government bonds to the European Central Bank as collateral against borrowing.
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