But it will be hard for the recovery in the second half of 2020 and 2021 to make up for this year’s downturn. Is the ECB’s current monetary policy sufficient to deal with the economic impact of the coronavirus (COVID-19), or can we expect additional measures soon? We have taken a number of key measures. In terms of monetary policy, our response to the situation has been very active, with three types of measure. First, we have provided liquidity to the banks, adjusting the rules on collateral for accessing liquidity-providing operations. European banks therefore have more liquidity at their disposal and at more favourable conditions. Second, we have responded with the measures taken by the ECB Banking Supervision. To avoid a credit crunch, we have eased the requirements on capital held by European banks, the classification of non-performing loans and the accounting rules. And third, we have launched the € million Pandemic Emergency Purchase Programme (PEPP), which will increase the total assets purchased by the ECB to € trillion in 2020. This is a large sum in order to maintain financial stability in the debt markets, in particular in the government bond markets, and to safeguard the monetary policy transmission mechanisms. In addition, of course, we have the fiscal policies of national governments and the European Commission, as well as the decision by the Eurogroup last week.
What advice would you give to euro area governments on how to deal with the economic impact of this pandemic? We need to be aware that this will lead to a significant drop in business revenues and the public sector will need to fill this gap. The main factor in terms of ensuring the economy starts to recover when the health situation improves is to try to “vaccinate”, as best we can, the business ecosystem of each country. What we need to do is try to keep the business system alive, as much as possible, and to come through this period. That is what my advice would be. Keeping this ecosystem going is also important in terms of safeguarding jobs and reducing the social impact. 3/3  BIS central bankers' speeches