Eesti Pank’s participation in the asset purchase programmes of the euro area
* net purchases include bonds redeemed at maturity
** at amortised acquisition cost
The expanded asset purchase programme (APP) of the European Central Bank is part of the package of non-standard monetary policy measures that also includes targeted longer-term refinancing operations. It was launched in mid-2014 to support the monetary policy transmission mechanism and provide sufficient flexibility in monetary policy to ensure price stability. The expanded APP covers the third covered bond purchase programme (CBPP3), the asset-backed securities purchase programme (ABSPP), the public sector purchase programme (PSPP), and the corporate sector purchase programme (CSPP).
Eesti Pank made purchases of bonds of supranational European institutions under the public sector purchase programme, and from June 2020 it also purchased Estonian government bonds. Eesti Pank earlier had a special exemption from June 2015 to May 2016 that allowed it to buy the bonds of the state-owned transmission system operator Elering.
From 2016 the central banks of the euro area were able to buy corporate bonds as part of the separate corporate sector purchase programme (CSPP). Corporate bonds were bought by the euro area central banks that specialise in them, which were the central banks of Belgium, Germany, Spain, France, Italy and Finland. Bonds issued by Estonian companies like Elering and Eesti Energia were bought by the Finnish central bank. The income and risks from the purchases of corporate bonds are shared between the central banks of the euro area using the capital key of the European Central Bank. The financial risks of the Elering bonds that Eesti Pank bought before the CSPP started are borne by Eesti Pank.
Eesti Pank also participated from 2020 in the third covered bond purchase programme (CBPP3) that was first announced in 2014. The commercial banks in Estonia first issued covered bonds only in 2020. The income and risks from the purchases of covered bonds are shared between the central banks of the euro area using the capital key.
Purchases and reinvestment at maturity under the APP ended in July 2023.
The pandemic emergency purchase programme (PEPP) of the European Central Bank is a non-standard monetary policy measure that was started in March 2020 to mitigate the risks from the Covid-19 pandemic to the monetary policy transmission mechanism and the outlook for the euro area. The Governing Council of the European Central Bank announced in December 2023 that it planned to continue in the first half of 2024 with full reinvestment of the principal of maturing securities purchased under the PEPP, and to terminate reinvestment by the end of 2024. Eesti Pank participated in bond purchases under the PEPP, though the central banks of the euro area do not publish those purchases by country.
More detailed and updated information on the APP can be found at: Asset purchase programmes (europa.eu).