ECB Minutes: Govt Bond Purchase Programme Was Effective Tool

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Policymaker of the European Central Bank observed that the government bond purchases under the pandemic emergency purchase programme, or PEPP, and asset purchase programme, or APP, were an effective tool in the current environment, the minutes of the meeting held on June 4 showed Thursday.

“There was broad agreement among members that while different weights might be attached to the benefits and side effects of asset purchases, the negative side effects had so far been clearly outweighed by the positive effects of asset purchases on the economy in the pursuit of price stability,” the minutes said.

“Using the ECB’s capital key as the benchmark was one of the safeguards helping to maintain incentives for sound fiscal policies,” the minutes said.

At the meeting, the Governing Council of the ECB increased the size of PEPP by EUR 600 billion to a total EUR 1,350 billion and retained the size of the monthly purchases under APP at EUR 20 billion.

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