ECB’s Operational Framework Review: New Operations to Be Introduced at Later Stage

13 March 2024

By Isabel Teles – FRANKFURT (Econostream) – New structural longer-term refinancing operations and a structural portfolio of securities that would contribute to the banking sector’s liquidity needs would be introduced by the European Central Bank at a later moment, according to a press release published Wednesday by the ECB announcing changes to its operational framework.

The process would begin ‘once the Eurosystem balance sheet begins to grow durably again, taking into account legacy bond holdings’, the ECB said.

‘These operations will make a substantial contribution to covering the banking sector’s structural liquidity needs arising from autonomous factors and minimum reserve requirements. The structural refinancing operations and the structural portfolio of securities will be calibrated in accordance with the above principles and to avoid interference with the monetary policy stance’, the ECB said.

The portfolios acquired under the asset purchase programme (APP) and the pandemic emergency purchase programme (PEPP) were expected to continue to be run off, according to the press release.