In either case, the loaned funds will tend to find their way into a deposit somewhere in the banking system. This process adds to the supply of money. If I stopped here, you might be left with the impression that the process of lending allows the banking system to create endless quantities of money at no cost.
With the above in mind and in order to safeguard the orderly transmission of the intended monetary policy stance, the Governing Council announced last December that PEPP reinvestments could be adjusted flexibly across time, asset classes and jurisdictions at any time.