European Central Bank Tools and Policy Actions B: Asset Purchase Programs

Yale Program on Financial Stability Case Study 2015-2B-V1

27 Pages Posted: 26 Jan 2016 Last revised: 4 Mar 2016

See all articles by Chase P. Ross

Chase P. Ross

Yale School of Management

Rosalind Wiggins

Yale Program on Financial Stability

Andrew Metrick

Yale School of Management; National Bureau of Economic Research (NBER); Yale University - Yale Program on Financial Stability

Date Written: July 15, 2015

Abstract

Beginning in August 2007, the European Central Bank (ECB) used standard and non-standard monetary policies as the global financial markets progressed from initial turmoil to a widespread sovereign debt crisis. This case describes the key features of the ECB’s asset purchase programs throughout the Global Financial Crisis and subsequent European sovereign debt crisis. These programs include the Covered Bond Purchase Programs (CBPP1, CBPP2, CBPP3), Securities Markets Program (SMP), Outright Monetary Transactions (OMT), Asset-backed Securities Purchase Program (ABSPP) and the Public Sector Purchase Program (PSPP).

In combating the crises, the ECB designed various innovative programs which it successively employed as the crises progressed. While some programs proved highly effective, others were less so. A major program, the OMT, was challenged in court and ultimately found to be within the ECB’s legal operating framework.

Keywords: Financial Crises, Financial Regulation, Asset Purchase

JEL Classification: G01, G28

Suggested Citation

Ross, Chase and Wiggins, Rosalind and Metrick, Andrew, European Central Bank Tools and Policy Actions B: Asset Purchase Programs (July 15, 2015). Yale Program on Financial Stability Case Study 2015-2B-V1. Available at SSRN: https://ssrn.com/abstract=2721470 or http://dx.doi.org/10.2139/ssrn.2721470

Chase Ross (Contact Author)

Yale School of Management

165 Whitney Street
New Haven, CT 06511
United States

Rosalind Wiggins

Yale Program on Financial Stability ( email )

165 Whitney Avenue
P.O. Box 208200
New Haven, CT 06520-8200
United States

Andrew Metrick

Yale School of Management ( email )

165 Whitney Avenue
New Haven, CT 06511
United States
(203)-432-3069 (Phone)

HOME PAGE: http://faculty.som.yale.edu/andrewmetrick/

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Yale University - Yale Program on Financial Stability

165 Whitney Avenue
P.O. Box 208200
New Haven, CT 06520-8200
United States

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