Sir, The need for European Central Bank action to combat the economic trends toward recession and deflation is altogether clear (“ Criticism of Draghi’s actions is misguided”, Editorial, October 3).

Moreover, given the ECB’s prospective role as market-maker for asset-purchase securitisations, the structural aspects of this programme seem attractive. Caution, though, needs best be exercised in order that the relatively risky business of lending to small and medium-sized enterprises apportions credit and programme risks to the local level wherever possible, where knowledge of small-business market conditions is most acute.

In addition, the smaller size of the ECB’s balance sheet compared to two years ago suggests that a “big bazooka” approach to asset purchases at this time is less preferable than a significant but graduated increase in euro outlays for this purpose, which would allow for a learning curve to be established regarding possible risk and return.

However, the Financial Times’s emphasis on the demand side nature of such asset purchases is mistaken; an enterprise-financing programme involving banks and funds, supported by the ECB, is more properly characterised as supply side-oriented with structural implications.

Perhaps German fears may be assuaged if this last point is duly noted, especially in view of domestic concerns regarding support for the euro project.

Jack Sustman, Austin, TX, US

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