ECB appoints BlackRock to advise on bond-buying

The European Central Bank has appointed BlackRock to advise on a possible bond-buying scheme as it looks to fight deflation in the eurozone.

The FT reports BlackRock’s advisory arm will aid the ECB in designing a programme to buy asset-backed securities to ease credit conditions in the single currency region.

BlackRock has previously been hired by the Greek central bank to scrutinise the balance sheet of its four largest banks and also worked with the Bank of Ireland during the  credit crisis.

Last week ECB president Mario Draghi said the programme to buy asset-backed securities were moving forward quickly. Draghi believes such a move would create demand for securitisations within the Eurozone and provide incentives for lending to businesses in need of credit.

In January Draghi said the central bank could buy packages of bank loans to households and companies as one way of fighting deflation. But he warned that too few simple asset-backed securities were being sold and more would have to be created before the ECB could step in and buy.