December 10, 2020

BOLD ECB ACTION SETS A HIGHLY SUPPORTIVE MONETARY POLICY STANCE ALSO IN 2021

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In Short

At today’s meeting the Governing Council delivered a bold policy package that is broadly in line with expectations. Measures include the extension of the PEPP (up by € 500 bn to March 2022), more TLTROs at better conditions and the extension of other tools (collateral rules, PELTROs) adopted in spring.
BOLD ECB ACTION SETS A HIGHLY SUPPORTIVE MONETARY POLICY STANCE ALSO IN 2021
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Highlights:

  • At today’s meeting the Governing Council delivered a bold policy package that is broadly in line with expectations.
    Measures include the extension of the PEPP (up by € 500 bn to March 2022), more TLTROs at better conditions and the extension of other tools (collateral rules, PELTROs) adopted in spring. 
  • Looking ahead, President Lagarde pointed out that further monetary policy action remains pandemic dependent and that the ECB expects herd immunity to be reached by year-end 2021. She also emphasized the ECB’s ability to act again if needed.
  • While no further ECB action seems imminent as of now, today’s action extends the highly supportive monetary policy environment throughout 2021. 
  • We view today’s announcements as a positive for credit markets as the ECB again made clear that it will not tolerate fragmentation across countries or sectors.

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BOLD ECB ACTION SETS A HIGHLY SUPPORTIVE MONETARY POLICY STANCE ALSO IN 2021
December 11th, 2020

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