The Governing Council has decided to instruct the relevant Eurosystem Committees, together with the ECB’s services, to expedite the completion of the planning of a new anti-fragmentation instrument for consideration by the Governing Council.
A new tool against the fragmentation of the Eurozone bond market was ordered by the ECB’s Governing Body after its extraordinary meeting.
The announcement issued states:
Today the Board of Directors met to exchange views on the current market situation. Since the gradual normalization process began in December 2021, the Board of Directors has pledged to act against the risks of resurgence.
The pandemic has left permanent vulnerabilities in the euro area economy, which in fact contribute to the uneven transmission of the normalization of our monetary policy to all jurisdictions.
Based on this evaluation, the Board of Directors decided to implement flexibility in reinvesting maturing bonds and are in the PEPP (pandemic bond market) portfolio, with the aim of maintaining the functioning of the monetary policy transmission mechanisma condition for the ECB to be able to meet a price stability mandate.
In addition, the Governing Council has decided to instruct the relevant Eurosystem Committees, together with the ECB’s services, to expedite the completion of the planning of a new anti-fragmentation instrument for consideration by the Governing Council.
