European Central Bank Quantitative Easing: The Detailed Manual

Breugel Institute,Grégory Claeys, Alvaro Leandro and Allison Mandra

On 22 January 2015 the European Central Bank (ECB) announced a massive expansion of its asset purchase programme. To supplement the ECB's Asset-Backed Securities and Covered Bonds Purchase Programmes (ABSPP and CBPP3) origi- nally launched in September 2014, the ECB intro- duced a new Public Sector Purchase Programme (PSPP). Under the PSPP, the Eurosystem will buy sovereign bonds from euro-area governments and securities from European institutions and national agencies. The purchases started on 9 March 2015 and will last at least until September 2016.

The ECB Governing Council also made it clear that the programme is open-ended and that purchases will be conducted until the ECB sees “a sustained adjustment in the path of inflation which is con- sistent with the aim of achieving inflation rates below, but close to, 2 percent over the medium term”.

.This Policy Contribution examines the detail of how quantitative easing will actually take place in the euro area, and its implications. All details avail- able on the programme come from the introduc- tory statement to the 22 January press conference by ECB President Mario Draghi, a press release published by the ECB on the same day, the account of the January Governing Council meeting published four weeks later, two press releases published after the 5 March press conference and the official ECB decision to be published in the Offi- cial Journal of the EU.

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