Deviations from the capital key - Public sector purchase programme

Policy changes: 1 March vs 29 June 2020

 1 March29 June
Interest rates
Main refinancing operations0%0%
Marginal lending facility0.25%0.25%
Deposit facility-0.50%-0.50%
Asset purchase programmes
Size & Time frameAPP at €20bn per month for as long as necessary (decided Sep 2019, effective from Nov 2019)Original APP + additional envelopes €120bn APP until end-2020 + €1.35tn PEPP until at least June 2021
Terms of purchase
Capital keyCapital key guides purchases in APPCapital Key remains for APP and PEPP but more flexibility for PEPP
Issuer limitIssuer limit at 33% of any country’s eligible bondsIssuer limit does not apply to PEPP
EligibilityEligibility in line with rating requirementsGreek government bonds included in PEPP but not in APP (PSPP). No catch-up purchases of these securities. Non-financial commercial papers (if sufficient credit quality) eligible for CSPP. Easing of collateral standards by adjusting main risk parameters of collateral framework.
MaturitiesMaturities for PEPP extended, new range is from 70days to 30 years and 364 days. For private securities the maturity range is at 28 days up to 30 years and 364 days. No maturity restrictions of ABSPP and CBPP3-eligible securities
ReinvestmentsApply to APPApply to APP until after rates start to rise, apply to PEPP until at least end-2022
Open market operations
Additional LTROsConducted as fixed rate tender procedures with full allotment, rate fixed at avg of deposit rate. Operations mature June 2020
TLTRO IIIConditions apply between June 2020-June 2021
Terms of purchase
Interest rateAs low as avg rate on deposit facility50bp below avg refi rate and even lower (up to 50bp below avg deposit rate) for those who maintain levels of credit provision
Borrowing allowance30% of stock of eligible loansRaised to 50%
Lending performance threshold2.5%Reduced to 0% (assessment period set to 1 March 2020)


For banks that do not reach the threshold different TLRO III rates apply (25bp below avg refi rate) and lending threshold reduced to 1.15%

Limit on stock of eligible loans that can be borrowed in each operation10%No limit
Repayment optionsEarly repayment option available after two years from settlementEarly repayment option available after one year from settlement starting in September 2021
PELTROsFrom May 20202: New series of non-targeted pandemic emergency longer-term refinancing operations, conducted as fixed rate tender procedures with full allotment, rate fixed at 25bp below refi rate. Operations mature in staggered sequence between July-September 2021



Collateral framework for liquidity facilities (LTROs and TLTROs)
Bank funding against loans to corporates and householdsGuided by additional credit claims (ACC) framworkExpanded ACC framework: acceptscollateral and new debtor types covered by Covid-19 government guarantees ; enlarges scope of acceptable credit assessment systems (e.g. supervisor-approved banks’ own assessments); reduces ACC loan level reporting requirements to speed up process
Non-uniform minimum size threshold for domestic credit claimsEUR 25,000Lowered to EUR 0
Concentration limit for unsecured bank bonds2.5%Raised to 10%
Greek Government BondsWaiver to accept as collateral
Risk tolerance level in credit operations (haircut parameters)Reduction of collateral valuation haircuts by fixed factor of 20%. Further haircut reduction of around 20% for on-marketable assets.
Rating measuresEligibility ‘freeze’, rating floor imposed at CQS5 (BB)
Rating measures (ABS)Eligibility ‘freeze’, rating floor imposed at CQS4 (BB+)
Other liquidity facilities
Bilateral swap/repo linesStanding swap arrangements with the UK, Canada, Japan, US, Switzerland and China. Expired swap arrangements with Denmark, Sweden, Latvia, Hungary and Poland.Additions of temporary swap arrangements with Denmark (reactivated, amount doubled to €24bn), Croatia (€2bn) and Bulgaria (€2bn). New repo line set up with Romania (€4.5bn)


Repo facilitiesNew Eurosystem repo facility EUREP as a precautionary backstop to address pandemic-related euro liquidity to non-Eurosystem central banks. Available until June 2021
 Level of capital defined by Pillar 2 Guidance and Liquidity Coverage RatioRelaxation of conditions: banks allowed to operate temporarily below level of capital defined by P2G and LCR
 Capital instruments need to qualify as Common Equity Tier 1 capitalThis has been lifted; banks now allowed to partially use capital instruments that do not qualify as CET1 eg Additional Tier 1 or Tier 2 instruments.


Relevant links:

2 March: Statement by ECB President

12 March: Monetary policy decisions

12 March: Supervisory policy decisions

18 March: ECB launches Pandemic Emergency Purchase Programme

25 March: ECB lifts limits on PEPP

20 March – 22 April : ECB (re) activates swap lines with Denmark, Croatia and Bulgaria

7 April: ECB announces package of temporary collateral easing measures

22 April: ECB takes steps to mitigate impact of possible rating downgrades on collateral availability

30 April: ECB eases conditions on TLTRO III, introduces PELTROs

4 June: ECB expands and extends pandemic emergency purchase programme, introduces reinvestments

25 June: ECB introduces new Eurosystem repo facility to provide euro liquidity to non-euro area central banks

Back to main page