The ECB’s Transmission Protection Instrument and Fiscal Stability

Katrin Assenmacher

The Economists' Voice, 2023, vol. 20, issue 1, 89-95

Abstract: The ECB’s Transmission Protection Instrument (TPI) supports the effective transmission of the monetary policy stance throughout the euro area, which is a precondition for the ECB to deliver on its price stability mandate. If activated, the Eurosystem would purchase securities issued in jurisdictions that experience a deterioration in financing conditions not warranted by country-specific fundamentals. The TPI thereby complements other tools to counter risks to the transmission mechanism such as the Pandemic Emergency Purchase Programme (PEPP) reinvestment flexibility and the Outright Monetary Transactions (OMT) programme.

Keywords: monetary policy; monetary and fiscal policy interactions; monetary policy transmission; pandemic emergency purchase programme; outright monetary transactions (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1515/ev-2023-0016

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