To counter the risks for economic activity and ensure the orderly transmission of monetary policy to all euro-area countries, which is hindered by widening yield spreads, the Governing Council first strengthened its existing asset purchase programmes (APP), increasing their volume to € billion until the end of 2020, and then introduced a new extraordinary programme specifically designed to deal with the consequences of the emergency (the pandemic emergency purchase programme or PEPP).
The largest banks benefitted in particular from a rebound in trading revenues and improved interest margins. In contrast, for smaller banks, net interest margins and non-interest income remained weaker than they were prior to the crisis, leaving preprovision net income at smaller banks somewhat lower than it was in 2007.