The European Central Bank has launched a sweeping review of its main pandemic crisis-fighting tool, which some of its top policymakers believe could lead to contentious changes to its other asset-purchase programmes.
The review will assess the impact of the flagship bond-buying scheme that the ECB launched in response to the coronavirus crisis in March and expanded to €1.35tn in June, two of its governing council members told the Financial Times on condition of anonymity.
They said important questions for the review would be to consider how long the Pandemic Emergency Purchase Programme should continue and whether some of its extra flexibility should be transferred to the ECB’s longer running asset-purchase schemes.
“Having that extra flexibility has been very useful,” said one council member. “We should look at all bits of the toolkit very carefully. We will have a good discussion, a good debate, and I don’t know where we will end up.”
The ECB declined to comment on the review, which is expected to be discussed by the council next month. It comes as debate is intensifying on the council over whether it should start drawing up plans to wind down the PEPP or consider expanding it further.
Until the new programme’s introduction, the ECB’s sovereign bond purchases…