logo

Financial Management Assignment : European Central Bank

   

Added on  2021-04-17

10 Pages2153 Words19 Views
Running head: FINANCEFinanceName of the Student:Name of the University:Authors Note:

FINANCE1Table of ContentsIntroduction:...............................................................................................................................2Discussion:.................................................................................................................................3Conclusion:................................................................................................................................6Reference and Bibliography:......................................................................................................8

FINANCE2Introduction:During 2015 January, ECB embarked in Quantitative Easing or expanded assetpurchase program for reducing the negative impact from low inflation. This relevantly helpedEuropean Central Bank to achieve their monetary objective of price stability. According toEcb.europa.eu (2018), year on year increase in harmonised index mainly helps in increasingprice stability, where consumer price for euro area are below 2%. The European Central Bankconducts Quantitative Easing by buying predetermined amount of euro sovereigns andinstitutions investment grade debt securities. This measure would allow European CentralBank to increase money supply and reduce market interest rate. This relatively allows thebank to increase their lending and introducer cheaper loans. This could allow the consumersto spend more and business will increase their investments.Figure 1: Inflation rate of Euro Area(Source: Tradingeconomics.com, 2018)The above figure mainly depicts the overall change in inflation rate of Euro area afterthe implementation of Quantitative Easing by European Central Bank. The inflation was

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
Reason behind adoption of Quantitative easing
|4
|690
|84

Treasury and Risk Management Assignment
|9
|1788
|60

FIN203 Corporate Finance Assignment: Bond Price
|8
|1388
|63

Indicating why Iceland got into trouble
|7
|1194
|321

Financial Management
|6
|1040
|207

Business Economics
|11
|1940
|407