FRANKFURT: The European Central Bank will shrink its balance sheet in coming years but will likely maintain a bond portfolio along with lending operations under a new framework to be adapted soon, ECB President Christine Lagarde said on Thursday.
“That (framework) will most likely comprise a combination of a portfolio of bonds, but also lending operation of different maturities,” Lagarde said.
“We will be finished in a couple of months.”
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The new framework, which will determine how the ECB provides liquidity to banks in a new normal, has been hotly debated and the key issue is just how big such a portfolio should be and whether the ECB should be continuously in the market buying up government debt.
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