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Licensed Unlicensed Requires Authentication Published by De Gruyter April 18, 2023

The ECB’s Transmission Protection Instrument and Fiscal Stability

  • Katrin Assenmacher EMAIL logo
From the journal The Economists’ Voice

Abstract

The ECB’s Transmission Protection Instrument (TPI) supports the effective transmission of the monetary policy stance throughout the euro area, which is a precondition for the ECB to deliver on its price stability mandate. If activated, the Eurosystem would purchase securities issued in jurisdictions that experience a deterioration in financing conditions not warranted by country-specific fundamentals. The TPI thereby complements other tools to counter risks to the transmission mechanism such as the Pandemic Emergency Purchase Programme (PEPP) reinvestment flexibility and the Outright Monetary Transactions (OMT) programme.


Corresponding author: Katrin Assenmacher, European Central Bank, Frankfurt, Germany, E-mail:
Comments by Ettore Dorrucci and Christophe Kamps are gratefully acknowledged. The views expressed in this article are those of the author and do not necessarily reflect those of the European Central Bank.

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Received: 2023-03-22
Accepted: 2023-04-03
Published Online: 2023-04-18

© 2023 Walter de Gruyter GmbH, Berlin/Boston

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