In this market, various institutions established special-purpose vehicles to issue commercial paper to help fund a variety of assets, including some private-label mortgage-backed securities, mortgages warehoused for securitization, and other long-maturity assets. Investors had typically viewed the commercial paper backed by these assets as quite safe and liquid.
At the same time, we would not need to make use of the full PEPP envelope if the Governing Council were to assess that market tensions had eased sufficiently. The sheer size of the PEPP also goes beyond its primary backstop function by providing additional support to the monetary policy stance.