First, extra asset purchases ensure that medium-term price stability – our primary mandate – is protected. But there is a second element to the PEPP related to the title of our first roundtable today – Monetary Policy and Financial Stability in the time of COVID-19. Purchases under the PEPP are conducted in a flexible manner.
This allows the programme to restore monetary policy transmission and perform the market stabilisation function. The PEPP proved successful in this role during the first months after its launch. The ECB made full use of the flexibility embedded in the PEPP by frontloading asset purchases and directing them to those market segments where they were most needed.