Editing European Central Bank (section)

=== Low inflation and quantitative easing (2015–2019) ===
In November 2014, the bank moved into its [[Seat of the European Central Bank|new premises]], while the [[Eurotower (Frankfurt am Main)|Eurotower building]] was dedicated to hosting the newly established supervisory activities of the ECB under [[European Banking Supervision]].<ref>{{Cite press release|date=2013-11-09|title=Eurotower to house ECB's banking supervision staff|url=https://www.ecb.europa.eu/press/pr/date/2013/html/pr131109.en.html|access-date=2021-04-03|website=European Central Bank|language=en}}</ref>

Although the sovereign debt crisis was almost solved by 2014, the ECB started to face a repeated decline<ref>{{Cite web|url=https://calrev.org/2019/05/04/on-the-causes-of-european-political-instability/|title=On the Causes of European Political Instability|last=Henderson|first=Isaiah M.|date=4 May 2019|website=The California Review|language=en-US|access-date=19 July 2019}}</ref> in the Eurozone inflation rate, indicating that the economy was going towards a deflation. Responding to this threat, the ECB announced on 4 September 2014 the launch of two bond buying purchases programmes: the Covered Bond Purchasing Programme (CBPP3) and Asset-Backed Securities Programme (ABSPP).<ref>{{Cite press release|url=https://www.ecb.europa.eu/press/pressconf/2014/html/is140904.en.html|title=Introductory statement to the press conference (with Q&A)|website=European Central Bank|language=en|access-date=25 September 2018}}</ref>

==== Asset Purchase programme (APP) ====
On 22 January 2015, the ECB announced an extension of those programmes within a full-fledge "[[quantitative easing]]" programme which also included sovereign bonds, to the tune of 60 billion euros per month up until at least September 2016. The programme was started on 9 March 2015.<ref>{{cite news|date=27 April 2017|title=Draghi fends off German critics and keeps stimulus untouched|newspaper=Financial Times|url=https://www.ft.com/content/efece562-2b30-11e7-bc4b-5528796fe35c |archive-url=https://ghostarchive.org/archive/20221210/https://www.ft.com/content/efece562-2b30-11e7-bc4b-5528796fe35c |archive-date=10 December 2022 |url-access=subscription |url-status=live}}</ref>

On 8 June 2016, the ECB added corporate bonds to its asset purchases portfolio with the launch of the corporate sector purchase programme (CSPP).<ref>{{Cite web|url=https://www.ecb.europa.eu/ecb/legal/pdf/celex_32016d0016_en_txt.pdf?0240957ff3a5d0b909a9482628799777|title=DECISION (EU) 2016/948 OF THE EUROPEAN CENTRAL BANK of 1 June 2016 on the implementation of the corporate sector purchase programme (ECB/2016/16)|access-date=29 January 2020|archive-date=17 May 2020|archive-url=https://web.archive.org/web/20200517052517/https://www.ecb.europa.eu/ecb/legal/pdf/celex_32016d0016_en_txt.pdf?0240957ff3a5d0b909a9482628799777|url-status=dead}}</ref> Under this programme, it conducted the net purchase of corporate bonds until January 2019 to reach about €177 billion. While the programme was halted for 11 months in January  2019, the ECB restarted net purchases in November 2019.<ref>{{Cite web|url=https://www.ecb.europa.eu/mopo/implement/omt/html/index.en.html#cspp|title=Corporate sector purchase programme (CSPP) – Questions & Answers|website=European Central Bank|date=7 December 2021}}</ref>

On May 5, 2020, the Court ordered the [[Bundestag]] and the [[Cabinet of Germany|Bundesregierung]] to ensure the ECB had carried out a proportionality assessment of the vast purchases of government debt in the [[Public Sector Purchase Programme]] (PSPP) to ensure the economic and fiscal policy effects do not outweigh its policy objectives.<ref name="Camous-2020b" /><ref name="Bundesverfassungsgericht-2023">{{Cite web |title=ECB decisions on the Public Sector Purchase Programme exceed EU competences |url=https://www.bundesverfassungsgericht.de/SharedDocs/Pressemitteilungen/EN/2020/bvg20-032.html |access-date=2023-12-20 |website=www.bundesverfassungsgericht.de}}</ref><ref>{{Cite web |last1=Arnold |first1=Martin |last2=Stubbington |first2=Tommy |date=2020-05-05 |title=German court calls on ECB to justify bond-buying programme |url=https://www.ft.com/content/a1beda5e-5c2d-429e-a095-27728ed2d72b |access-date=2023-12-20 |website=Financial Times}}</ref><ref name="Arnold-2020c">{{Cite web |last1=Arnold |first1=Martin |last2=Hall |first2=Ben |date=2020-05-06 |title=German court ruling casts doubt on European monetary policy |url=https://www.ft.com/content/07f19a1b-7494-439d-9765-7fd7ddf09860 |access-date=2023-12-20 |website=Financial Times}}</ref> The PSPP-implementing decision has been considered an act [[ultra vires]] by the ECB as it was too arbitrary and lacks reasoning in ints proportionality assessment.<ref name="Bundesverfassungsgericht-2023" /><ref>{{Cite web |date=2020-05-05 |title=German Constitutional Court rules the Court of Justice's Weiss judgment ultra vires due to poor reasoning and weak standard of review |url=https://eulawlive.com/german-constitutional-court-rules-the-court-of-justices-weiss-judgment-ultra-vires-due-to-poor-reasoning-and-weak-standard-of-review/ |access-date=2023-12-20 |website=EU Law Live |language=en-GB}}</ref><ref>{{Cite journal |last=Smits |first=René |date=2021-04-14 |title=The European Central Bank's Pandemic Bazooka: Mandate Fulfilment in Extraordinary Times |url=https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3824740 |journal=EU Law Live |pages=19 |ssrn=3824740}}</ref> This ruling by the German Constitutional Court comes at a difficult time for the ECB as it was at the time considering expanding the PEPP. The ruling also reflects the mistrust within some parts of Germany in the ECB, which is seen there as an institution that bails out profligate Southern European countries.<ref name="Arnold-2020c" /> Moreover, this ruling also highlights the vital problem on the euro area architecture, as the range of instruments can use to fulfil its mandate remains unclear.<ref name="Camous-2020b" />

{{As of|2021|post=,}} the size of the ECB's quantitative easing programme had reached 2947 billion euros.<ref>{{Cite web |date=2021-03-25 |title=Asset purchase programmes |url=https://www.ecb.europa.eu/mopo/implement/app/html/index.en.html |access-date=2021-04-03 |website=European Central Bank |language=en}}</ref>

==== Long Term Refinancing Operations (LTRO) ====
The long term refinancing operations (LTRO) are regular open market operations providing financing to credit institutions for periods up to four years. They aim at favoring lending conditions to the private sector and more generally stimulating bank lending to the real economy,<ref>{{Cite web |last= |first= |date=2023-11-29 |title=Open market operations |url=https://www.ecb.europa.eu/mopo/implement/omo/html/index.en.html |access-date=2023-12-05 |website=European Central Bank - Eurosystem |language=en}}</ref> thereby fostering growth.

In December 2011 and January 2012, in the aftermath of the [[2008 financial crisis]], the ECB implemented two LTROs, injecting over €1000 billion of liquidity in the Eurozone financial system. They were later criticized for their inability to revive growth and to help truly revive the real economy, despite having stabilized the Eurozone's financial institutions.<ref name="Fontan-2018">{{Cite journal |last=Fontan |first=Clement |date=2018-10-12 |title=Frankfurt's double standard: the politics of the European Central Bank during the Eurozone crisis |url=https://www.tandfonline.com/doi/full/10.1080/09557571.2018.1495692 |journal=Cambridge Review of International Affairs |volume=31 |issue=2 |pages=175 |doi=10.1080/09557571.2018.1495692 |via=Taylor & Francis Online}}</ref> Further, these operations were devoid of monitoring from the ECB regarding the use made of these liquidities<ref name="Fontan-2018" /> and it appeared that banks had significantly used these funds to pursue carry-trade strategies,<ref>{{Cite journal |last1=Acharya |first1=Viral |last2=Steffen |first2=Sascha |date=6 June 2014 |title=The "greatest" carry trade ever? Understanding eurozone bank risks |url= |journal=Journal of Financial Economics |pages=215–236 |doi=10.1016/j.jfineco.2014.11.004 }}</ref> purchasing sovereign bonds with higher rates and corresponding maturity to generate profits, instead of increasing private lending.<ref name="Fontan-2018" /><ref name="Dwyer-2023">{{Cite journal |last1=Dwyer |first1=Gerald P. |last2=Gilevska |first2=Biljana |last3=Nieto |first3=Maria J. |last4=Samartín |first4=Margarita |date=2023-07-01 |title=The effects of the ECB's unconventional monetary policies from 2011 to 2018 on banking assets |journal=Journal of International and Financial Markets, Institutions & Money |volume=87 |issue=87 |pages=4 |doi=10.1016/j.intfin.2023.101800 |doi-access=free }}</ref>

These critics and deficiencies brought the ECB to instigate targeted long term refinancing operations (TLTROs), first in September and later in December 2014.<ref>ECB press release, 18 September 2014.</ref> These complementary programs imposed conditionality on the LTROs.<ref name="Fontan-2018" /> The TLTROs provided low cost financing to participating banks, under the condition that they reached certain targets in terms of lending to firms and households.<ref name="Dwyer-2023" /> The participating banks were thus more incited to lend to the real economy.

A third wave of TLTRO's was announced on 7 March 2019, namely the TLTRO III.<ref>{{Cite web |date=2019-03-07 |title=Monetary Policy Decisions |url=https://www.ecb.europa.eu/press/pr/date/2019/html/ecb.mp190307~7d8a9d2665.en.html |access-date=2023-12-10 |website=European Central Bank - Eurosystem}}</ref> Under TLTRO III, the interest rate was set at -0.5% below the deposit facility rate (DFR), under condition that banks reached a specific lending performance threshold. The TLTRO III programme was successful to stimulate credit growth.<ref name="Barmeier-2023">{{Cite journal |last1=Barmeier |first1=Marcel |last2=Falath |first2=Juraj |last3=Kiššová |first3=Alena |last4=Lojschová |first4=Adriana |date=2023 |title=Impact of TLTRO III on bank lending: The Slovak experience |url=https://nbs.sk/dokument/b6528586-2679-4245-a850-cca84c5a9ca6/stiahnut/?force=false |journal=National Bank of Slovakia Working Papers |issue=2/2023 |pages=4 |via=National Bank of Slovakia}}</ref><ref>{{Cite journal |last1=Silva |first1=Emilie Da |last2=Grossmann-Wirth |first2=Vincent |last3=Nguyen |first3=Benoit |last4=Vari |first4=Miklos |date=2021 |title=Paying Banks to Lend? Evidence from the Eurosystem's TLTRO and the Euro Area Credit Registry |url=https://ideas.repec.org//p/bfr/banfra/848.html |journal=Working Papers |language=en}}</ref>