The Governor of the Bank of Greece, G. Stournaras, referred to the recording of the extraordinary measures taken by the ECB, which include the exceptional participation of Greek bonds in the PEPR program, speaking at the fifth simulation conference of the European Central Bank.
Through this program, the ECB has already purchased Greek government bonds amounting to 35 billion euros.
The decisions regarding this program, as pointed out in yesterday’s relevant report of APE-MPE, are likely to be taken at the meeting of the Governing Council of the ECB on 16 December.
It is reminded that according to the initial planning of the program, the ECB will continue until the end of 2023 to “renew” the expiring bonds, but without offering additional liquidity.
Mr. Stournaras, referring to the contribution of the PEPP program for the normalization of liquidity conditions during the pandemic crisis, stated, among other things, that: Net monthly purchases will last at least until March 2022 and yet until we judge that the pandemic crisis is over. It is considered very effective in holding back the rise, due to high uncertainty, government bond yields and discrepancies between them. At the same time, the smooth operation of the monetary policy transmission mechanism in all euro area countries is ensured.
The effectiveness of the program is mainly due to the pioneering flexibility in the composition of securities markets by the Eurosystem. The value of securities purchased can fluctuate over time depending on financial conditions. In addition, there is a possibility that the distribution of public sector securities markets may temporarily deviate from the key of participation of each national central bank in the share capital of the ECB (which is calculated according to the size of its economy).
The PEPP emergency program granted Greek government securities a derogation from the minimum credit rating requirements of the Public Sector Purchase Program (PSPP), which helped reduce the impact of the pandemic on financial conditions in Greece. »
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