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With the eurozone facing the possibility of yearslong economic stagnation, its central bank is expected to soon announce its biggest stimulus measure yet.Under the new stimulus being considered, the central bank would buy governments bonds from banks with newly created money.Sabine Lautenschlaeger, a top ECB official who has questioned the need for bond-buying, says eurozone banks are already awash in cash thanks to cheap ECB credit.Supporters say that even if bond-buying does not increase the amount of lending in the economy, it would at least have one positive aspect – weakening the euro.In any case, supporters say, the economic risks are so great that the ECB cannot afford inaction.The ECB's balance sheet – one measure of its stimulus efforts – has shrunk from over 3 trillion euros (currently $3.5 trillion) in 2012 to 2 trillion euros as banks have paid back cheap loans. That means the ECB would need at least a trillion simply to restore the level of stimulus it was providing earlier.A smaller program of, say, 500 billion euros might disappoint market expectations and have less effect.
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