The European Central Bank (ECB) has issued a press release regarding the decisions it has made on several measures to address tensions in certain market segments which are hampering the monetary policy transmission mechanism and consequently the effective conduct of monetary policy oriented towards price stability in the medium term. The measures will not affect the ECB’s stance on monetary policy.

The ECB has decided:

  • To conduct interventions in the euro area public and private debt securities markets to ensure depth and liquidity in those market segments that are dysfunctional. The objective of this programme is to address the malfunctioning of securities markets and restore an appropriate monetary policy transmission mechanism.
  • To adopt a fixed rate tender procedure with full allotment in the regular 3 month longer term refinancing operations (LTROs) to be allotted on 26 May and 30 June 2010.
  • To conduct a 6 month LTRO with full allotment on 12 May 2010, at a rate which will be fixed at the average minimum bid rate of the main refinancing operations (MROs) over the life of this operation.
  • To reactivate, in coordination with other central banks, the temporary liquidity swap lines with the Federal Reserve, and resume US dollar liquidity-providing operations at terms of 7 and 84 days. These operations will take the form of repurchase operations against ECB eligible collateral and will be carried out as fixed rate tenders with full allotment. The first operation will be carried out on 11 May 2010.

View ECB decides on measures to address severe tensions in financial markets, 10 May 2010