Analysts at Brown Brothers Harriman explained one can fully agree that the buying of corporate bonds, which only the BOJ of the major central banks have included under its asset purchase program, is not ideal and is no panacea, without dismissing the effort as ineffective or incredible as in lacking credibility.
"It is not clear how much corporate bonds the ECB will purchase. Given the size of the market, the average daily turnover, and other considerations, ECB purchases have been projected to be around 5-10 bln euros a month.
Assume the corporate bond purchases begin in June, and there is no further extension in the program beyond March 2017, the ECB would likely buy 45-90 bln euros in corporate bonds. This seems like a rather modest amount given the low interest rate savings that have already been achieved.
Of course, monetary policy cannot address all of Europe's economic challenges. No one ever said otherwise. If it were the only thing the ECB did, many would be right to dismiss it. However, it is part and parcel of a larger program with different pieces aimed at different challenges.
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Ultimately, what the ECB is buying with its printing press is time, and it makes no bones about it. It is buying time for the banks to repair their balance sheets. It is buying time for governments to enact structural reforms. It is buying time for the deflationary forces to subside. It can lead the proverbial horse to the water, but if they don't drink is it really the central bank's fault?"