The real problem with ECB QE is that it doesn't work as advertised. In order for asset purchases to raise inflation you need a combination of (speaking simply) the quantity theory of money, the multiplier model of bank lending, and loanable funds, all of which are bunk. 1/-
In my opinion the real reason why the ECB needed QE was that in 2014 banks were signalling virtue by repaying TLTROs early, thereby draining themselves of reserve which was showing in erratic eonia rates 2/-
Even under a regime of unlimited liquidity (against good collateral) in ECB refinancing operations, the ECB cannot force banks to borrow if they don't want to 3/-
Therefore if the ECB needs to force banks to hold more reserves in order to stabilise eonia, it has no choice but to buy assets 4/-
This works even if eurozone banks are not selling their bonds to the ECB, because only banks can hold reserves. So, if the ECB sells to non-banks or foreigners the reserves still end on the banks' balances 5/- 
This is very similar to what the Fed has been doing to stabilise the repo market since September 2019: buy bonds to force the banks to hold more reserves. Nothing to do with QE or inflation or stimulus. This is just reserve management 6/-
One sign that the ECB has gone too far in its reserve provision is the need for tiering of excess reserves. 7/-
The ECB is closing spreads and keeping yields low on government debt. We all saw why that was necessary between March 12 and 17 8/-
Do German nihilists really want the ECB to dump government bonds now? I say bring it on, then wait for the screams of panic to come from the EUCo. 9/9
