Germany’s Bundesbank says it is considering a buyback to stabilize the markets
GERMANY (AP) Germany’s Federal Reserve is considering buying up more than 100 billion euros ($120 billion) of sovereign bonds from foreign investors and is considering holding an emergency meeting in an effort to stabilize the markets.
In a letter to investors Friday, the Bundesbank said it was considering buying the bonds of large companies and financial institutions, as well as a number of smaller companies and bond-holders, in order to help stabilize the financial system.
The bank, which was formed by Chancellor Angela Merkel in January, is the country’s central bank and is responsible for overseeing the economy and overseeing the euro zone’s economic recovery.
It has said it will not immediately begin buying sovereign bonds, even though it plans to buy about 80 billion euros this year from the ECB and the European Commission.
It has previously held talks with the European Central Bank and the International Monetary Fund to try to stabilize its finances.
The Bundesbank is also considering buying about 70 billion euros from companies and trusts in the euro area and a further 15 billion euros in bonds held by the European Investment Bank.
The bank also said it is in discussions with investors on a possible buyback of its debt.
It also said in the letter that it has already discussed with the Bundesstellungsverfassungsgerichtshof, or Bundestag, the idea of selling the government bonds it owns.
It said the bank would use its purchasing power to help ensure that German taxpayers receive a fair share of the government debt.
The German government has said that it expects to collect about 90 billion euros of the debt by 2020.
The finance ministry did not immediately respond to a request for comment.