Policy Article

Limits in terms of eligible colleteral and policy risks of an extension of the ECB's quantitative easing programme

By expanding the Extended Asset Purchase Programme the ECB intends to increase the dosage of its QE policies. We inspect the availability of eligible assets in euro area securities markets under the adjusted criteria and analyse the effectiveness of QE policies in the current economic environment. We also explore whether the effectiveness of monetary policy interventions could be enhanced. While the effectiveness of QE currently seems to be rather limited, the policy risks of QE are increasing; these risks include risks for the independence and credibility of the ECB, increasing systemic risks, and risks to lower incentives for structural reforms.