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15.12.2020 51

ECB QE Monitor - December 2020

Published December 15, 2020

5 to 10 minutes

5 to 10 minutes

Key points for this month


  • The main pillars of the new package are the PEPP and TLTRO. The new package strongly focused on extending the duration more than the intensity of the monetary accommodation.
  • Pandemic bond-buying program was raised by €500bn euros to a total of €1,850 billion and extended by nine months to at least the end of March 2022.
    • Strong emphasis on program flexibility.
    • Net purchases will be conducted until it judges that the coronavirus crisis phase is over.
    • Principal payments from maturing securities purchased under the PEPP will be extended until at least the end of 2023.
  • As a result, technical factors will continue to play a major in the euro fixed income market.
    • ECB firepower over the next 15 months is huge : €1100bn (PEPP) +  €20bn/month (APP) or €93bn/month
    • Estimates of monthly purchases by program over the next 15 months: €81bn of public sector debt, €9bn of corporate debt and  €3bn of covered bonds.
    • ECB’s PEPP would ensure that net issuance is negative for all EGBs.
    • As of end of 2021:
      • Percentage of German public securities held by the Eurosystem could rise above 40%.
      • The Eurosystem will held 35%-40% of the eligible of corporate debt.

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