Decision (EU) 2016/702 of the European Central BankShow full title

Decision (EU) 2016/702 of the European Central Bank

of 18 April 2016

amending Decision (EU) 2015/774 on a secondary markets public sector asset purchase programme (ECB/2016/8)

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) Decision (EU) 2015/774 of the European Central Bank (ECB/2015/10)(1) established a secondary markets public sector asset purchase programme (hereinafter the ‘PSPP’), which expanded the Eurosystem's existing asset purchase programmes to include public sector securities. Alongside the third covered bond purchase programme, the asset-backed securities purchase programme and the forthcoming corporate sector purchase programme, the PSPP is part of the expanded asset purchase programme (APP). The APP aims to enhance the transmission of monetary policy, facilitate the provision of credit to the euro area economy, ease borrowing conditions for households and firms and contribute to returning inflation rates to levels that are below but close to 2 % over the medium term, consistent with the European Central Bank's primary objective of maintaining price stability.

(2) In line with the Governing Council's mandate to ensure price stability, certain features of the PSPP should be modified in order to ensure a sustained adjustment in the path of inflation towards levels that are below, but close to 2 %, over the medium term. The changes are in line with the Governing Council's monetary policy mandate and duly reflect risk management considerations.

(3) More specifically, in order to achieve the PSPP's objectives, the liquidity provided to the market through the combined monthly purchases under the APP should be increased to EUR 80 billion.

(4) In addition, the issuer and issue share limits for marketable securities issued by eligible international organisations and multilateral development banks should be increased. The new threshold was determined in order to ensure that the envisaged purchases will continue to be proportionate to the aims of the PSPP, also considering that the risk of obstructing orderly debt restructurings is limited.

(5) Starting in April 2016, the allocation between purchases of eligible marketable debt securities issued by international organisations and multilateral development banks and purchases of other eligible marketable debt securities under the PSPP should be modified in order to achieve the PSPP's objectives and ensure its smooth implementation for the duration of the PSPP and at its increased purchase volume.

(6) Furthermore, for the purposes of the external credit assessment institution (ECAI) credit assessment of marketable debt securities, ECAI issue ratings should also be taken into account where neither the issuer nor the guarantor has an ECAI rating. However, the marketable security should nonetheless have the required issue rating to comply with the eligibility criteria for marketable assets for Eurosystem credit operations. Decision (EU) 2015/774 (ECB/2015/10) should take account of the fact that those eligibility criteria are now contained in Part Four of Guideline (EU) 2015/510 of the European Central Bank (ECB/2014/60)(2).

(7) Therefore, Decision (EU) 2015/774 (ECB/2015/10) should be amended accordingly,

HAS ADOPTED THIS DECISION:

(1)

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).

(2)

Guideline (EU) 2015/510 of the European Central Bank of 19 December 2014 on the implementation of the Eurosystem monetary policy framework (ECB/2014/60) (OJ L 91, 2.4.2015, p. 3).