The Eurosystem’s regular open market operations consist of one-week liquidity-providing operations in euro (main refinancing operations, or MROs) as well as three-month liquidity-providing operations in euro (longer-term refinancing operations, or LTROs). MROs serve to steer short-term interest rates, to manage the liquidity situation and to signal the monetary policy stance in the euro area, while LTROs provide additional, longer-term refinancing to the financial sector.
In recent years, the regular operations have been complemented by two liquidity-providing long-term refinancing operations in euro with a three-year maturity (maturing on 29 January 2015 and on 26 February 2015), as well as by US dollar liquidity-providing operations. In addition, the ECB announced in June 2014 that it would conduct a series of targeted longer-term refinancing operations (TLTROs) aimed at improving bank lending to the euro area non-financial private sector, excluding loans to households for house purchase, over a window of two years. (For modalities of the TLTROs see the press releases of 5 June 2014 and 3 July 2014.)
In addition, in 2009 and 2011 the Eurosystem launched two covered bond purchase programmes (the CBPP, which ended in June 2010, and CBPP2, which ended in October 2012). From 10 May 2010 to February 2012 it conducted interventions in debt markets under the securities markets programme (SMP), which was terminated in September 2012. In August 2012 the ECB announced the possibility of conducting outright open market operations in secondary sovereign bond markets to safeguard an appropriate monetary policy transmission and preserve the singleness of its monetary policy. The technical features of such operations, named outright monetary transactions, were announced in September 2012 (see: Technical features of OMT).
In September 2014, the ECB announced two new purchase programmes, namely the ABS purchase programme (ABSPP) and the third covered bond purchase programme (CBPP3). The programmes will enhance transmission of monetary policy, support provision of credit to the euro area economy and, as a result, provide further monetary policy accommodation.
On 9 March 2015 the Eurosystem started the purchase of bonds issued by euro area central governments and certain agencies and international or supranational institutions located in the euro area under the Public Sector Purchase Programme (PSPP). Combined, the ABSPP, the CBPP3 and the PSPP constitute the Expanded Asset Purchase Programme (APP). Monthly purchases under the APP will amount to €60 billion. They are intended to be carried out until end September 2016 and in any case until the Governing Council sees a sustained adjustment in the path of inflation that is consistent with its aim of achieving inflation rates below, but close to, 2% over the medium term.
For details see FAQ on asset purchases, Press release announcing the expanded asset purchase programme (with annex on operational modalities), Q&A on the public sector purchase programme (PSPP), Implementation aspects of the PSPP.
Securities purchased under the PSPP are made available for securities lending: Lending of holdings purchased under the PSPP.
An annex entitled “Chronology of monetary policy measures of the Eurosystem” is provided in each issue of the ECB’s Economic Bulletin (formerly: Monthly Bulletin). For details of the ECB’s response to the recent financial crisis, see the article in the October 2010 issue of the Bulletin, and President Draghi’s speech “The role of monetary policy in addressing the crisis in the euro area” (15 April 2013). For the challenges to monetary policy in a low inflation environment, see President Draghi’s speech “Monetary policy in a prolonged period of low inflation” (26 May 2014).