While the objective of the SMP is to repair the transmission mechanism, quantitative easing aims at injecting additional central bank liquidity in order to stimulate the economy. As a result, quantitative easing, as for instance with the Bank of England, comes with precise quantitative targets. By contrast, the size of SMP purchases is driven by an intervention strategy which seeks to improve market functioning.
Let me stress that the liquidity injected through SMP purchases is re-absorbed on a weekly basis so as to specifically neutralise the programme’s liquidity impact. It is important to note that with its contribution to the monetary policy transmission mechanism, the SMP, in conjunction with the SMP-liquidity absorbing operations, is oriented towards price-stability.