×

ECB's Constancio: $505B of ABS qualify for purchase

The European Central Bank (ECB) is embarking on a new policy phase with its latest stimulus measures, ECB Vice President Vitor Constancio said, vowing to steer the central bank's balance sheet "significantly higher".

Since the summer, the ECB has cut interest rates to record lows, offered banks new long-term loans, and announced plans to buy private sector assets - a program with which it aims to stimulate lending to support the flagging euro zone economy.

Read MoreWilbur Ross: Why Draghi is right

Constancio said in the text of a speech released on Wednesday that "the measures decided in the past few months mark a new phase in the ECB's approach."

"With these new measures, the Governing Council demonstrates that we are ready to actively steer the size of our balance sheet towards significantly larger levels, so as to further ease the stance of monetary policy," he added.

Vitor Constancio, Vice President of the Supervisory Board of the European Central Bank in February, 2014.
Daniel Roland | AFP | Getty Images
Vitor Constancio, Vice President of the Supervisory Board of the European Central Bank in February, 2014.

Stressing that the economic recovery in the euro zone is "still weak and fragile", the ECB vice president said the period of very low inflation levels the bloc is experiencing "raises serious concerns".

Read MoreEurope'scurrency a tailwind for markets

Euro zone inflation slowed to 0.3 percent last month - far below the ECB's target level of just under 2 percent over the medium term.

Turning to the ECB's plans to buy private sector assets, Constancio said the stock of covered bonds eligible for purchase by the central bank amounted to about 600 billion euros.

Around 400 billion euros ($506 billion) of asset-backed securities (ABS) qualify for purchase by the ECB under its new plan, he added.

"We are, of course, aware that the amounts that we will be able to buy will be lower than the theoretical amount," he said.

Read More'Weak and uneven': IMF cuts global growth forecast

"The majority of the combined stock of ABSs and covered bonds is not held by banks and our purchases are not aimed at buying these securities mostly from banks," he added.

"Nevertheless, in the present environment, direct purchases of private assets by the central bank can also support banks on the capital side."

Follow us on Twitter: @CNBCWorld