The European Central Bank will start buying bonds from seven more government-owned German banks as part of its stimulus program in order to avoid running out of debt to buy after three years of hefty purchases, Reuters reported March 23.
The latest move adds banks such as the Investitionsbank Berlin and Bavaria's LFA Förderbank Bayern to a small group of German development lenders whose debt the ECB has already been buying to boost inflation.
The move enlarges the pool of German debt, which the ECB can tap as part of its €2.55 trillion quantitative easing scheme, Reuters said.
But with Germany enjoying a fiscal surplus, finding enough German bonds to buy has become harder for the ECB, which has trimmed its debt purchases from Germany in recent months.
The ECB is expected to ease its bond purchases in 2018 and begin raising interest rates from mid-2019 onward.