The purpose of the new programme was to promote a general compression of yields across all asset classes and to generate incentives for banks to rebalance their portfolios towards assets with higher risk-adjusted returns – such as loans to firms and households.
Overall, these measures have been designed to complement each other and have proved effective and adaptable to the series of shocks which have hit the euro area economy since their introduction. Indeed, the deposit rate has been reduced further (it now stands at –0.4%).