London

THE European Central Bank (ECB) is expected to launch sizeable bond purchases in the hope that renewed quantitative easing (QE) will reignite a eurozone economy which is partly stagnant and partly in deflationary recession.

This isn't the first bout of QE, that is, monetary easing via the purchase of sovereign and other bonds of banks so that they can have cash reserves to make loans to corporations and individuals to spur direct investment and consumption. From late 2008 onwards, the ECB loaned money to European banks that had encountered steep losses during the financial crash. From 2010 to 2011, the ECB bought more than 200 billion euros (S$310 billion) of Spanish, Italian, Greek, Irish and Portuguese bonds to counter the Greek and other crisis.