Central Bank Bond Purchase Program

[tommog]

Hi,

I was hoping to learn a bit more about how the central banks (ECB for example) go about implementing QE/Bond purchases.

Are they just always in the market drip feeding bids in. Or is it conducted like an auction in the sense there is a pre determined date and time they will go in to the market?

Many thanks

 

[Martinghoul]

Diff banks do it differently.

The Fed and the BoE conduct regular reverse auctions. The ECB (actually it's not the ECB, but rather its National Central Bank (NCB) members) goes in and asks dealers for offers, which it then lifts.

 

[tommog]

Cheers Martin,

But do they handle them as they do the auctions where usually around 10am everyday there will be an auction in the EZ of some sort. Would there be a specific time/day they enter the market?

 

[Martinghoul]

Cheers Martin,

But do they handle them as they do the auctions where usually around 10am everyday there will be an auction in the EZ of some sort. Would there be a specific time/day they enter the market?

Yes, that's the case for the Fed and the BoE, in fact. They follow pre-announced schedules.

 

[tommog]

Thanks

 

[eminiglobex]

tom fed details here Tentative Outright Treasury Operation Schedule - Federal Reserve Bank of New York

 

[ortonstarus]

Central bank always purchase the bond and give some money to the company so its very useful for developing the business. Bank also arrange some money for investment and provide some best interest of investors.