Key points for this month:
- The pace of PSPP net purchases has been strong at the beginning of December (frontloading of purchases) and fell to zero for the last week of the year. From January, the pace of purchases will be lower as the Eurosystem will only purchase €30bn of assets per month.
- In 2018, PSPP redemptions (reinvestments) will account for €116 bn (€4.4bn for CSPP).
- It is becoming harder to estimate the average maturity of the PSPP purchases as we do not have many details about the reinvestments. Note that the deviations from the capital key rule have been more limited than during the previous months.
- Holdings of German PSPP securities account for €459bn. The estimated average maturity of December purchases has slightly declined again, to 5.8 years.
- ECB’s balance sheet accounts for more than 39% of GDP. Banks’ excess reserves declined slightly at the end of 2017 but have rebounded over the first days of 2018 (about €1.8 trn).
January 04, 2018