The ECB confirmed the purchases of secured debt from mid-October onwards and the purchases of asset backed securities (ABS) from Q4 on, lasting for at least two years, Mario Draghi stated following the October meeting of the ECB Governing Council held in Naples.
Draghi stressed that the key motive for the ECB liquidity measures were the weak inflation data released earlier this week, combined with a challenging economic outlook for the eurozone.
“The purchase programmes will last for at least 2 years. Together with the TLTROs, they will have a sizeable impact on balance sheet” Draghi said, referring to the ECB’s ambition to increase the size of the ECB balance sheet by a third to €3trn.
These programmes are aimed at boosting lending to SME’s, the ABS purchases and the TLTRO programme are meant to be simple and transparent” Draghi argued. Purchases will include Greek and Cypriot assets, Draghi confirmed, however, he stressed that additional precautionary measures would be taken to control the risk levels of these assets.
Draghi highlighted that the ECB Governing Council had decided unanimously to introduce further unconventional monetary policy tools.