The European Central Bank is studying a new bond-buying program to prevent the spread between bond market yields from widening next year.
The new plan will replace the existing crisis tools as a complement to the old, open-ended quantitative easing program.
The ECB is studying a new bond-buying programme to prevent the spread between bond market yields from widening when the emergency bond-buying programme expires next year, according to people familiar with the matter.
The unnamed official said the plan would replace existing crisis tools as a complement to the old, open-ended quantitative easing programme. The plan currently buys 20 billion euros ($23.1 billion) of bonds per month.
They said that no final decision had been made. An ECB spokesman declined to comment on the report, but pointed out that many of the options discussed by staff would not necessarily be presented to the management committee or the executive committee.
Officials say the launch of a new bond-buying programme could save the bonds of highly indebted countries such as Italy from a sell-off once the 1.85 trillion euro emergency bond-buying programme (PEPP) ends in March.
German Bunds futures and the euro rose slightly after the news, but the euro still fell from the previous trading day to 1.1552 against the dollar.
Under the plan, bond purchases will be carried out selectively, bypassing the current rule that central banks can only buy bonds related to the size of each country's economy, officials said. The rule, which has been in place since the launch of a large-scale asset purchase programme in 2015, is designed to allay concerns about ECB financing for governments.