Open market operations

Open market operations play an important role in steering interest rates, managing the liquidity situation in the market and signalling the monetary policy stance.

Five types of financial instruments are available to the Eurosystem for its open market operations. The most important instrument is the reverse transaction, which may be conducted in the form of a repurchase agreement or as a collateralised loan. The Eurosystem may also make use of outright transactions, issuance of debt certificates, foreign exchange swaps and collection of fixed-term deposits.

Open market operations are initiated by the ECB, which decides on the instrument and the terms and conditions. It is possible to execute open market operations on the basis of standard tenders, quick tenders or bilateral procedures.

Four types of open market operation

Open market operations may differ in terms of aim, regularity and procedure.

  • 1. Main refinancing operations operations are regular liquidity-providing reverse transactions conducted by the Eurosystem, with a frequency and maturity of one week. They are executed in a decentralised manner by the national central banks on the basis of standard tenders and according to an indicative calendar published on the ECB’s website. The main refinancing operations play a pivotal role in fulfilling the aims of the Eurosystem's open market operations and normally provide the bulk of refinancing to the financial sector.

  • 2. Longer-term refinancing operations are liquidity-providing reverse transactions with a longer maturity than the main refinancing operations. Regular longer-term refinancing operations have a maturity of three months and are conducted each month by the Eurosystem on the basis of standard tenders in accordance with the indicative calendar on the ECB’s website.

    The Eurosystem may also conduct non-regular longer-term operations, with a maturity of more than three months. Longer-term open market operations differ from the traditional provision of liquidity in their longer maturity and generally also in the larger volumes granted and/or more attractive rates. Some of these operations are specifically intended as a substitute for short- and medium-term operations of financial players on the financial markets if those markets are paralysed, e.g. because of suddenly escalating risk aversion. The Eurosystem thus acts as an intermediary between the commercial banks. Other operations aim to provide liquidity for the commercial banks so that monetary easing is properly reflected in the credit terms that they apply to businesses and households.

    Apart from the regular longer-term open market operations, the following operations have been used in the past:

    • the three-year longer-term refinancing operations (3y LTROs) granted in 2011 and 2012;
    • the targeted longer-term refinancing operations (TLTROs) granted from 2014 to 2021.
    • the pandemic emergency longer-term refinancing operations (PELTROs) granted in 2020 and 2021.


  • 3. Fine-tuning operations can be executed on an ad hoc basis to manage the liquidity situation in the market and to steer interest rates. In particular, they are aimed at smoothing the effects on interest rates caused by unexpected liquidity fluctuations. Fine-tuning operations are primarily executed as reverse transactions, but may also take the form of foreign exchange swaps or the collection of fixed-term deposits. The instruments and procedures applied in the conduct of fine-tuning operations are adapted to the types of transaction and the associated specific objectives pursued in performing the operations. Fine-tuning operations are normally executed by the Eurosystem through quick tenders or bilateral procedures. The Eurosystem may select a limited number of counterparties to participate in fine-tuning operations.

  • 4. Structural operations can be carried out by the Eurosystem through reverse transactions, outright transactions, and the issuance of debt certificates. These operations are executed whenever the ECB wishes to adjust the structural position of the Eurosystem vis-à-vis the financial sector (on a regular or non-regular basis). Structural operations in the form of reverse transactions and the issuance of debt instruments are carried out by the Eurosystem through standard tenders. Structural operations in the form of outright transactions are normally executed through bilateral procedures.