Decision (EU) 2016/948 of the European Central BankShow full title

Decision (EU) 2016/948 of the European Central Bank

of 1 June 2016

on the implementation of the corporate sector purchase programme (ECB/2016/16)

THE GOVERNING COUNCIL OF THE EUROPEAN CENTRAL BANK,

Having regard to the Treaty on the Functioning of the European Union, and in particular the first indent of Article 127(2) thereof,

Having regard to the Statute of the European System of Central Banks and of the European Central Bank, and in particular the second subparagraph of Article 12.1 in conjunction with the first indent of Article 3.1, and Article 18.1 thereof,

Whereas:

(1) The European Central Bank (ECB), together with national central banks of Member States whose currency is the euro may operate in the financial markets by buying and selling marketable instruments outright.

(2) Decision ECB/2014/40(1), which established a third covered bond purchase programme, was adopted on 15 October 2014. Decision (EU) 2015/5 of the European Central Bank (ECB/2014/45)(2), which established an asset-backed securities purchase programme, was adopted on 19 November 2014. Decision (EU) 2015/774 of the European Central Bank (ECB/2015/10)(3), which established a secondary markets public sector asset purchase programme (hereinafter the ‘PSPP’), was adopted on 4 March 2015 and expanded the existing asset purchase programmes. Alongside the targeted longer-term refinancing operations pursuant to Decision ECB/2014/34 of the European Central Bank(4) and Decision (EU) 2016/810 of the European Central Bank (ECB/2016/10)(5), these asset purchase programmes are aimed at further enhancing the transmission of monetary policy, facilitating credit provision to the euro area economy, easing borrowing conditions for households and businesses and contributing to returning inflation rates to levels below, but close to, 2 % over the medium term, consistent with the ECB's primary objective of maintaining price stability.

(3) On 10 March 2016 the Governing Council decided to further expand the abovementioned asset purchase programmes and initiate a corporate sector purchase programme (CSPP), as part of the single monetary policy and in pursuit of its price stability objective. This decision was taken in order to further strengthen the pass-through of the Eurosystem's asset purchases to the financing conditions of the real economy, and in order to provide, in conjunction with the other non-standard monetary policy measures in place, further monetary policy accommodation and contribute to a return of inflation rates to levels below, but close to, 2 % over the medium term.

(4) The CSPP will be part of the asset purchase programme (APP), under which purchases are intended to run until the end of March 2017, or beyond, if necessary, and in any case until the Governing Council sees a sustained adjustment in the path of inflation consistent with its aim of achieving inflation rates below, but close to, 2 % over the medium term.

(5) The CSPP should contain a number of safeguards to ensure that the envisaged purchases will be proportionate to its aims. These safeguards should also ensure that related financial risks are taken into account in the CSPP's design and should reflect risk management perspectives. In addition, eligible marketable debt instruments issued by public undertakings should be subject to limits, consistent with those applied to purchases under the PSPP.

(6) The CSPP should fully comply with the obligations of the Eurosystem central banks under the Treaty, including the monetary financing prohibition in relation to the purchase of eligible marketable debt instruments issued by public undertakings.

(7) The CSPP should respect the principle of an open market economy with free competition, while giving due regard to the formation of market prices and the functioning of markets.

(8) In line with the other components of the APP, the principal payments of the eligible marketable debt instruments purchased under the CSPP should be reinvested as the underlying debt instruments mature, for as long as necessary, thus contributing to favourable liquidity conditions and to an appropriate monetary policy stance.

(9) The outright purchases of eligible marketable debt instruments by the Eurosystem under the CSPP should be implemented in a decentralised manner in accordance with this Decision, and should be coordinated by the ECB, thereby safeguarding the singleness of the Eurosystem's monetary policy,

HAS ADOPTED THIS DECISION:

(1)

Decision ECB/2014/40 of the European Central Bank of 15 October 2014 on the implementation of the third covered bond purchase programme (OJ L 335, 22.11.2014, p. 22).

(2)

Decision (EU) 2015/5 of the European Central Bank of 19 November 2014 on the implementation of the asset-backed securities purchase programme (ECB/2014/45) (OJ L 1, 6.1.2015, p. 4).

(3)

Decision (EU) 2015/774 of the European Central Bank of 4 March 2015 on a secondary markets public sector asset purchase programme (ECB/2015/10) (OJ L 121, 14.5.2015, p. 20).

(4)

Decision ECB/2014/34 of the European Central Bank of 29 July 2014 on measures relating to targeted longer-term refinancing operations (OJ L 258, 29.8.2014, p. 11).

(5)

Decision (EU) 2016/810 of the European Central Bank of 28 April 2016 on a second series of targeted longer-term refinancing operations (ECB/2016/10) (OJ L 132, 21.5.2016, p. 107).