The Eurosystem's public and private sector asset purchase programmes and securities lending

General features and rationale

Over the years, the Eurosystem has launched several programmes to purchase public and private sector securities in order to preserve the proper transmission of monetary policy, provide additional stimulus in the presence of an effective lower bound on policy rates, and stabilize markets in the face of fragmentation.

Purchase programmes, conducted with monetary policy counterparties or with investment counterparties, are carried out according to criteria defined on the basis of the principles of decentralization and specialization. They are subject to different risk-sharing schemes, mitigated by eligibility criteria for the purchasable assets, which coincide in part with those for assets used as collateral for Eurosystem refinancing operations (see the 'Collateral management' section).

The programmes

The Eurosystem's asset purchase programme (APP), conducted between the end of 2014 and mid-2023, served the purpose of providing further monetary stimulus, in addition to that arising from the key interest rates, with a view to ensuring the smooth transmission of monetary policy, in an environment of prolonged low inflation and of key interest rates that had reached their effective lower bound.

The pandemic emergency purchase programme (PEPP) is the programme launched in March 2020 in response to the unprecedented economic and financial shock triggered by the COVID-19 pandemic. It was designed both to stabilize the financial markets, by supporting their smooth functioning, and to counter the negative repercussions of the pandemic on the monetary policy transmission mechanism and on the outlook for growth and inflation.

The securities purchased under the APP and the PEPP are made available to the market through the Eurosystem's securities lending programme in order to limit the scarcity effects associated with the implementation of these programmes.

Among the other Eurosystem asset purchase programmes announced over the years, two are still in the monetary policy toolkit. The transmission protection instrument (TPI) is an instrument introduced in 2022 to ensure that the monetary policy stance is transmitted smoothly across all euro-area countries, and outright monetary transactions (OMTs), introduced in 2012, with the aim of safeguarding the smooth transmission and singleness of monetary policy.

In March 2024, following the review of the monetary policy operational framework, the Governing Council of the ECB announced that it will continue to provide liquidity through a broad mix of instruments, including, at a later stage, a structural portfolio of securities.