It continues to stand ready to adjust all of its instruments, as appropriate, to ensure that inflation moves towards its aim in a sustained manner, in line with its commitment to symmetry. The ECB’s accountability arrangements The ECB has been able to deliver a strong policy response during the crisis thanks in part to its ability to act in full independence, as set out in the Treaty. This independence in turn relies on effective accountability mechanisms to ensure that the ECB fully pursues its mandate, as also enshrined in the Treaty. Delivering on the ECB’s Treaty obligations is a shared challenge for both the ECB and the European Parliament. While requiring effort and commitment from both sides, it is in both our institutions’ interest. To be effective in assessing the ECB’s actions and relaying people’s concerns, accountability practices need to meet three criteria. First, they need to be commensurate with the ECB’s tasks and responsibilities, implying that they have to evolve in line with the complexity and scale of the ECB’s measures. Second, they need to be underpinned by timely and adequate information and transparency arrangements. And third, they need to be based on mutual trust to ensure constructive discussions on critical and difficult issues. Over the years, our two institutions have worked together to build and strengthen their accountability relationship, well beyond the requirements of the Treaty. Indeed, I would argue that this relationship meets the three criteria I have just spelled out.
First, we have provided access to central bank liquidity at very favourable terms and over long tenors to help maintain the supply of credit from the banking sector. To this end, we have adjusted the terms and conditions of our targeted longer-term refinancing operations (TLTRO III), which strengthen the incentives for banks to lend to the real economy. For a year, banks will be able to borrow at negative rates, which can be as low as –1% on the condition that they lend to the economy. Largely in response to this recalibration, we have seen a very high take-up by banks. And second, we have launched the pandemic emergency purchase programme (PEPP) to ensure the smooth transmission of our monetary policy and to ease the overall monetary policy stance thereby helping to offset the downward impact of the pandemic on the projected path of inflation. The PEPP, launched with an initial envelope of € billion in March, was increased by € billion in June to a total of € billion. We will conduct net asset purchases under the PEPP until at least the end of June 2021 and, in any case, until the Governing Council judges that the coronavirus crisis phase is over. In the current environment of elevated uncertainty, the Governing Council will carefully assess all incoming information, including developments in the exchange rate, with regard to its implications for the medium-term inflation outlook.