Central banks across the world are deploying every trick in the book to save the broken and bankrupt global economy that was derailed by bat soup. The latest trick, already tried and failed miserably by the Bank of Japan (BOJ), is that the European Central Bank (ECB) could one day start purchasing exchange-traded funds (ETFs) as part of its open market operations.
On Tuesday, ECB policymaker Peter Kazimir was quoted by Reuters as saying the central bank could one day purchase ETFs as part of a stimulus plan but gave no firm decision if the policy would be added to its monetary toolkit.
“It (the purchase of ETF) is a very technical issue that has been open at a technical level and experts are dealing with it. I don’t rule it out for the future but no decision on this topic has been made,” Kazimir said at a presser at the National Bank of Slovakia, which he heads.
We would assume Kazimir’s statement is a trial balloon as in what future policy could be coming next, and the ECB is analyzing how investors responded to the idea of the potential new tool.
We noted on Monday that the Federal Reserve went full BOJ-tard, by announcing it would soon purchase corporate bond ETFs to prop up the market.
The NY Fed disclosed that it would actively start buying “eligible corporate bonds and eligible ETFs no later than September 30, 2020.”
And since the Fed announced it would eventually purchase corporate bond ETFs on Monday — Wall Street was seen front running the Fed on the same day, pouring $1 billion into iShares IBoxx $ Invest Grade Corp Bd Fd (LQD).
As for the ECB and FED, well, they’re likely both going full BOJ-tard, with the descent into Japanification ever faster.
We must note, the BOJ owns 73% of all ETFs and has lost 3 trillion Yen on its equity purchases despite printing money out of thin air.