Market participants can then freely set their prices and market-oriented premia can be established for credit and liquidity risks. When, in January 2015, the Governing Council decided on the purchase of government bonds, there was consensus on the Council that such purchases in principle represent a legitimate monetary policy instrument for ensuring price stability.
Bond purchases undoubtedly also have an influence on countries’ refinancing costs. That, of course, changes nothing in respect of the monetary policy nature of the measures in the current situation of persistently too low inflation. And in any case, the traditional instrument of key rate changes influences countries’ refinancing costs.