From a broader perspective, the introduction of the PEPP – and the June and December expansions, which increased the maximum volume of net purchases to € trillion – led to a period of gradual easing of financing conditions in the euro area, not only for sovereign debt, but also other market segments such as corporate debt. In addition, according to analysis by the Banco de España, the PEPP is having a markedly favourable impact on GDP growth and inflation in the euro area.1 This easing has been essential for providing fiscal authorities in all countries in all euro area countries with room for manoeuvre, which has allowed them to deploy the measures to support the income of households and firms that I have mentioned earlier. In addition to the PEPP, another key instrument in the monetary policy response during the crisis are the TLTROs. This programme affords banks funding under particularly advantageous conditions, provided they meet certain targets in terms of lending to firms and households (excluding, in the latter case, loans for house purchase). With the onset of the pandemic, this programme was modified to make it even more attractive to banks, enabling them to obtain funding at an interest rate that could temporarily be as low as -1%, on the condition that they do not reduce their volume of eligible lending in light of the pandemic crisis. This instrument has also proved very effective.
03.03.2021  The European Central Bank’s monetary policy: response to the pandemic crisis and future challenges* Universidad Autónoma de Madrid Pablo Hernández de Cos Governor of the Banco de España  *English translation of the Spanish original  Distinguished Rector, fellows, ladies and gentlemen, good morning: It is a great pleasure for me to be able to participate in this event organised by the Universidad Autónoma de Madrid. First, I would like to take this opportunity to share with you some thoughts on the role that the European Central Bank's (ECB) monetary policy has played in response to the COVID19 pandemic in the past year, helping to stave off some of the more serious consequences, at least from the economic standpoint, of the different waves of the disease in Europe. Second, I shall give a brief overview of current economic developments in the euro area and the role that monetary policy could play over the coming quarters. In the third part of my speech, I would also like to reflect on some of the medium and longterm challenges for monetary policy in advanced economies, which have prompted the main central banks, among them the ECB, to launch a review of their monetary policy strategy. ECB monetary policy measures in response to the pandemic The outbreak of COVID-19 in Europe in late February and early March 2020 triggered an unparalleled economic shock which required an urgent and decisive economic policy response to prevent the effects of the crisis from becoming permanent.