The famous euro sign landmark is photographed outside the former headquarters of the European Central Bank (ECB) in Frankfurt, late evening January 8, 2015. REUTERS/Kai Pfaffenbach
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The European Central Bank is considering a hybrid approach to government bond purchases which would combine the ECB buying debt with risk sharing across the eurozone and, in a nod to German qualms, separate purchases by national central banks.Sources familiar with the discussions said such an option for bond-buying, also known as quantitative easing (QE), is among the tools the ECB is preparing ahead of its Jan. 22 policy meeting should it decide to act to address falling consumer prices and a growing risk of deflation in the eurozone.A third central bank source said one of the options that was discussed was one where the ECB would buy a certain share of the total program and in case of default the risk would be shared among national central banks depending on their capital share. The remaining part of the program's volume would be bought by national central banks, but at their own risk.Neither the ECB nor Bundesbank would comment.The second source said the ECB's share could, for example, be between 20 and 40 percent.Two other sources said it was not decided yet whether the ECB would announce a total volume at all and the central bank might alternatively set a monthly purchase limit but set no deadline for ending purchases.
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