Stefano Fugazzi (ABC Economics) – The following chart is based on the data the European Central Bank (ECB) published yesterday on its Asset Purchase Programmes, including statistics regarding the Public Sector Purchase Programme (PSPP), better known as Quantitative Easing (QE).
Notes on non-conventional monetary policies
The Covered Bond Purchase Programme (CBPP) was a programme announced on 7 May 2009 on the basis of article 18 of the ECB statute. It has been in operation during two periods. The ECB first intervened between July 2009 and June 2010 (CBPP1), during which time the ECB outright purchased 60 billion euro of covered bonds. On 6 October 2011 the ECB announced it would reactivate the programme (CBPP2) and that it was intended to amount to 40 billion euro between November 2011 and October 2012. On 3 November 2011 the ECB announced further details about maturities, eligibility and counterparties (CBPP3).
The Securities Market Programme (SMP) programme was initiated in May 2010 as part of the euro-system’s single monetary policy. It was intended as a temporary program to address malfunctioning in the securities markets and to allow the normal functioning of the monetary policy transmission mechanism. The interventions were sterilised as equivalent liquidity was withdrawn from the system by the ECB to leave the SMP monetary policy “neutral”. There was no monetisation of eurozone sovereign debt. Liquidity was absorbed by the ECB via the collection of 1-week fixed term deposits.
Public Sector Purchase Programme (PSPP) i.e. the QE – In March 2015 the ECB and national central banks of eurozone member states started buying 60 billion euro of government debt each month. That figure included re-bundled private debt, asset-backed securities and covered bonds, typically worth about 10 billion euro, on top of the roughly 50 billion euro in state bonds. The programme will run until September 2016 or until there has been a “sustained” improvement in consumer price inflation, which recently turned negative.