2/4  BIS central bankers' speeches  So does that mean in other words that the ECB would step in if contagion effects occurred? We would have to analyse the situation. The appropriate instrument would be what’s known as Outright Monetary Transactions. Under this programme, the ECB would make targeted purchases of the relevant country’s sovereign debt subject to certain conditions.
But we would not even contemplate this move unless that country applies for assistance from the European Stability Mechanism, the ESM rescue fund, and accepts its conditions. At present, however, people are also speculating about new targeted longer-term refinancing operations, or TLTROs, for banks.