ECB to purchase covered bond
FRANKFURT: Today Council of the European Central Bank (ECB) had decided on the CBPP2, the technical modalities of which were published on 3 November 2011. The purchases of covered bonds commenced in November 2011. The aim of the programme was to contribute to easing funding conditions for credit institutions and enterprises and to encouraging credit institutions to maintain and expand their lending to customers. The initially targeted total nominal amount of purchases was €40 billion, and the purchases were expected to have been carried out in full by 31 October 2012. As already announced at the press conference of 4 April 2012, the ECB had slowed down the pace of purchases in response both to investors’ increasing demand for euro area covered bonds and to the decline in the supply of covered bonds.