NBB participation in the Eurosystem's securities purchase programme
Question discussed at the 2010 general meeting
On 9 May 2010, the Governing Council of the ECB adopted several measures to address the severe tensions in certain market segments which are hampering the monetary policy transmission mechanism and thereby the effective conduct of monetary policy oriented towards price stability in the medium term.
The Governing Council has decided:
- to conduct interventions in both the public and private debt securities markets in the euro area (Securities Markets Programme) so as to ensure depth and liquidity in the market segments which are dysfunctional. In order to sterilise the impact of these interventions, specific operations are being conducted to re-absorb the liquidity injected through the Securities Markets Programme. These operations will ensure that the monetary policy stance is not affected.
- to adopt a fixed-rate tender procedure for regular 3-month longer-term refinancing operations (allotted on 26 May and 30 June 2010).
- to conduct, on 12 May 2010, a 6-month longer-term refinancing operation at a fixed rate.
- to reactivate, in coordination with other central banks, the temporary liquidity swap lines in foreign currency concluded with the US Federal Reserve System, and resume US dollar liquidity-providing operations at terms of 7 and 84 days.
All the central banks in the Eurosystem, and that includes the NBB, are taking part in the securities purchase programme.
The scale of these interventions, i.e. the volume and the markets on which the securities are bought, is fixed by the Governing Council of the ECB. The risks involved with these purchases (as well as the proceeds from them) are shared among the Eurosystem NCBs in proportion to the ECB's capital key.
Purchases made by the Bank are reported in the annual accounts under item 7.1 "Securities held for monetary policy purposes" and are not part of the Bank's statutory investments.