ECB’s QE gets corporate touch

European Central Bank (ECB) for the first time added a series of corporate names to the list of eligible securities.

ECB getting tired of Government bonds?

With addition of corporate names to its list, European Central Bank (ECB) has broadened the scope of quantitative easing.

However these purchases might have much more direct impact in a country's stock market and business rather than generalized purchase of government securities.

Until today ECB was buying just government and agency debt.

Will this disrupt business competition?

The names that were added to ECB's hot list are likely to receive much cheaper funding. As of now it added Italian infrastructure companies such as ENEL, SNAM.

This move is unlikely to disrupt business functions as these companies run monopolies.

This change in stance is highly significant. Expect the list to be further updated with corporate names from various countries

This move is likely to result in greater transmission of benefits to the targeted economy.