13 Feb 2016

Limits in terms of eligible collateral and policy risks of an extension of the ECB’s quantitative easing programme

Daniel Gros

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At the press conference following the ECB Governing Council meeting of 3 December 2015, the President of the ECB Mario Draghi reiterated the readiness of the ECB to adopt, if necessary, additional measures – in terms of size, composition and duration of the of the asset purchase programme EAPP – in order to maintain an appropriate degree of monetary accommodation. This may renew criticism to the ECB for not complying with its mandate and its quasi-fiscal role. The notes included in this compilation requested by the Committee on Economic and Monetary Affairs (ECON) for the February 2016 Monetary Dialogue discusses the range of policy instruments potentially available to the ECB to enhance the effectiveness of the EAPP programme, assess the potential limits of a further expansion of asset purchases and investigate key credibility issues eventually faced by the ECB.