Instead, it looks as though it will merely be a revival of the failed SMP (Securities Market Program) with fewer restrictions in terms of size and duration of the program.
By sterilizing the bond buying (draining the proceeds of the funds injected into the market via money-market operations), Draghi appeases the Bundesbank but saps the bond-buying program of the euro-weakening that is so desperately needed by the European export sector.
There is no mention in the Bloomberg story of whether the bonds purchased would be senior to bonds owned by the private sector, as was the case in the SMP, and which turned out to be a fatal flaw for that program.
My guess is that the market will ultimately be disappointed if what we’ve heard this morning is the sum total of the program.
