Monetary policy

What role has the ECB played in the COVID-19 crisis?

The European Central Bank’s (ECB) actions during the COVID-19 crisis have been key to stabilising financial markets and ensuring accommodative financing conditions for governments, businesses and households across the euro area.

The ECB’s measures have focused on its asset purchase programmes (APP and PEPP) and on longer-term refinancing operations (LTROs, TLTRO III and PELTROs).

On 12 March 2020, the ECB announced an easing of the conditions of its TLTRO III operations, a further 12 LTROs (with a June 2020 maturity) and additional net asset purchases of €120 billion under the APP until end-2020.

In the same month, the ECB continued to announce measures to support the economy, such as weekly US dollar funding operations, adjustments to collateral requirementss and, in particular, a new exceptional asset purchase programme to combat the impact of the COVID-19 pandemic on the economy (PEPP) with an initial envelope of €750 billion.

In April 2020, additional collateral easing measures were announced, together with more favourable conditions for TLTRO III operations during the pandemic period and seven exceptional PELTROs (with a 2021 Q3 maturity).

The ECB subsequently increased the total envelope for the PEPP, extended the programme’s horizon and continued to reinvest the principal payments from maturing securities.