ECB has modelled trillion euro asset purchase programme - FAZ

FRANKFURT, April 4 Fri Apr 4, 2014 10:34am EDT

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FRANKFURT, April 4 (Reuters) - The European Central Bank has modelled the economic effects of buying 1 trillion euros ($1.37 trillion) of securities as part of a quantitative easing (QE) programme, a German newspaper reported late on Friday.

ECB President Mario Draghi said on Thursday that there was unanimity on the Governing Council for the central bank to consider printing money to boost the euro zone economy if inflation stayed very low for a long time.

The Frankfurter Allgemeine Zeitung said that the ECB had estimated that buying 1 trillion euros of assets over a year would add 0.2 or 0.8 percentage points to inflation, depending on the economic models used.

"The question would be whether the private debt market in Europe is big enough for QE," the newspaper quoted someone whom it described as a central bank insider as saying.

The euro fell to its lowest level against the dollar since Feb. 27.

The newspaper also said that an unnamed senior central banker was extremely concerned about possible market distortions that could result from such an intervention, and feared such purchases could create a bubble in the corporate bond market.

The ECB was not immediately available for comment. ($1 = 0.7291 Euros) (Reporting by David Milliken and Eva Taylor)

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