ECB tapering: beware of global consequences

摘要

The ECB's scaling back of its QE programme in 2018 could be more disruptive to global financial markets than the Federal Reserve's ongoing balance sheet unwinding. ECB bond purchases led Eurozone private investors to inject a massive amount of funds into global debt markets over the last few years. As the ECB reduces its stimulus, Eurozone investors will gradually pare back the build-up of their foreign debt exposures. The full unwinding of ECB QE will see investors rebalance toward domestic debt securities.