FRANKFURT (MNI) - European Central Bank President Mario Draghi said Thursday that quantitative easing was discussed during its September meeting when the Bank decided to begin purchasing asset backed securities and covered bonds as part of a new effort to stoke inflation amid the region's flagging recovery.
Watch the video below to get Jim Cramer's thoughts on what the ECB's move means for investors:
Speaking during his regular monthly press conference in Frankfurt, during which the Governing Council decided to reduce the Bank's key interest rates to record lows, Draghi said the asset purchases would have a "sizeable impact" on the ECB's balance sheet.
"The Eurosystem will purchase a broad portfolio of simple and transparent asset-backed securities with underlying assets consisting of claims against the euro area no-financial private sector under and ABS purchase programme," Draghi said in his opening statement. "In parallel, the Eurosystem will also purchase a broad portfolio of euro-denominated covered bonds issued buy MFI's domiciled in the euro area."
"These decisions will add to the range of monetary policy measures taken over recent months, he continued. "In particular, they will support our forward guidance on the key ECB interest rates and reflect the fact that there are significant and increasing differences in the monetary policy cycle between major advanced economies."
A precise assessment of the impact, Draghi said, was too complex at this time and would become clearer after the execution of the second leg of the ECB's planned Targeted Longer Term Refinancing Operations (TLTRO) programme in December.