The European Central Bank (ECB) utilizes asset purchase programmes as a critical instrument within its monetary policy toolkit. These programmes are designed to maintain price stability and support the euro area economy. Often referred to in the context of strategies to Purchase Euro assets and manage inflation, the ECB’s approach has evolved significantly since its inception.
Initiated in mid-2014, the asset purchase programme (APP) was introduced as part of a broader package of non-standard monetary policy measures. Alongside targeted longer-term refinancing operations, the APP aimed to bolster the monetary policy transmission mechanism and provide the necessary policy accommodation to ensure price stability within the euro area.
The APP is composed of several distinct programmes:
- Asset-backed securities purchase programme (ABSPP)
- Third covered bond purchase programme (CBPP3)
- Corporate sector purchase programme (CSPP)
- Public sector purchase programme (PSPP)
Following the ECB’s monetary policy strategy review, which concluded in July 2021, the Governing Council reaffirmed the primary role of policy rates as the ECB’s main monetary policy instrument. However, recognizing the limitations of policy rates, particularly at the effective lower bound, the council acknowledged the importance of other tools. These include forward guidance, asset purchases, and longer-term refinancing operations, all deployed as needed. This strategic evolution firmly established asset purchase programmes as an integral part of the ECB’s arsenal for steering monetary policy and ensuring inflation stabilizes at the 2% target over the medium term. The concept of “purchase euro” in this context refers to the ECB’s strategic buying of assets denominated in euros to influence financial conditions within the euro area.
Over time, the Governing Council has actively managed the pace of these purchases and reinvestments, making several key decisions to recalibrate the programme. A significant recalibration occurred on 15 June 2023, when the Governing Council announced the discontinuation of reinvestments under the APP starting in July 2023. Currently, the APP portfolio is projected to decrease as assets mature, unless the Governing Council decides to reactivate this instrument to further steer the ECB’s monetary policy in the future and strategically purchase euro denominated assets as needed.
A History of APP Net Purchases
Since October 2014, the Eurosystem has been actively purchasing securities through the APP. The Governing Council has adjusted the volume of net purchases under these programmes at various times to respond to evolving economic conditions:
- March 2015 to March 2016: €60 billion per month of net purchases
- April 2016 to March 2017: €80 billion per month of net purchases
- April to December 2017: €60 billion per month of net purchases
- January to September 2018: €30 billion per month of net purchases
- October to December 2018: €15 billion per month of net purchases
- January to October 2019: No net purchases, reinvestment of principal payments only
- November 2019 to March 2022: €20 billion per month of net purchases (including a temporary €120 billion increase from March to December 2020)
- April 2022: €40 billion of net purchases
- May 2022: €30 billion of net purchases
- June 2022: €20 billion of net purchases
- July 2022 to February 2023: No net purchases, full reinvestment of principal payments
- March 2023 to June 2023: No net purchases, partial reinvestment of principal payments
- July 2023 onwards: No reinvestments of principal payments
On June 9, 2022, the Governing Council decided to halt net asset purchases under the APP as of July 1, 2022. However, it continued to fully reinvest principal payments from maturing securities purchased under the APP. Subsequently, on December 15, 2022, the Governing Council announced a gradual and predictable decline in the APP portfolio starting in March 2023. This reduction involved not reinvesting all principal payments from maturing securities, with a monthly decrease of €15 billion on average until the end of the second quarter of 2023. The future pace of portfolio reduction was to be determined later. Further details on the partial reinvestment modalities were announced on February 2, 2023. Finally, on May 4, 2023, and confirmed on June 15, 2023, the Governing Council announced the discontinuation of all reinvestments under the APP as of July 2023, marking a significant shift in the ECB’s approach to purchase euro assets.
Chart: Net asset purchases by programme under APP
Source: ECB
Notes: The average monthly APP targets were initially set by the ECB’s Governing Council at the start of the PSPP in March 2015. The additional envelope of €120 billion decided on March 12, 2020, is linearized for illustration, while its implementation was with additional flexibility.
The table below provides a snapshot of Eurosystem holdings and changes in holdings under the APP.
Eurosystem holdings under the asset purchase programme
| ABSPP | CBPP3 | CSPP | PSPP | APP | |
|---|---|---|---|---|---|
| Holdings* in December 2024 | 7,047 | 253,009 | 288,377 | 2,124,731 | 2,673,164 |
| Monthly net purchases | -1,218 | -4,335 | -3,326 | -13,814 | -22,694 |
| Quarter-end amortisation adjustment and STRIPS redemptions | 0 | 0 | 0 | 0 | 0 |
| Holdings* in January 2025 | 5,829 | 248,674 | 285,050 | 2,110,917 | 2,650,470 |
*At amortised cost, in EUR millions, at month-end. Figures may not add up due to rounding. Figures are preliminary and subject to revision.*
Amortisation adjustments are applied at the end of each quarter, reflecting the accounting principle of revaluing securities purchased below face value upwards towards maturity, and vice versa for securities purchased above face value. STRIPS are accounted for at the end of each month.
Weekly changes are detailed in the Eurosystem weekly financial statement. Historical data is available in the Statistics section under Data on daily liquidity conditions.
APP cumulative net purchases, by programme
As of the end of January 2025, the total stock of Eurosystem APP bonds reached €2861 billion. The chart below illustrates the cumulative net purchases since the programme’s inception.
APP Redemptions and Reinvestments
During the reinvestment phase of the APP, the Eurosystem generally followed the principle of market neutrality, aiming for smooth and flexible implementation when reinvesting APP redemptions. Notably, for corporate bond reinvestments from October 2022, the Eurosystem prioritized issuers with stronger climate performance, reflecting a move towards environmentally conscious purchase euro asset strategies.
Further emphasizing this shift, on February 2, 2023, the Governing Council decided to intensify the focus on climate performance during the partial reinvestment phase for corporate bond purchases.
To ensure a consistent and balanced market presence, the Governing Council opted to distribute the reinvestment of principal redemptions over time.
The table below outlines the estimated monthly redemption amounts for the APP over the upcoming 24 months.
Expected monthly redemption amounts for the APP over a rolling 24-month horizon (in EUR millions)*
| EUR millions | ABSPP | CBPP3 | CSPP | PSPP | APP |
|---|---|---|---|---|---|
| Aug 24 | 243 | 541 | 244 | 10,533 | 11,561 |
| Sep 24 | 354 | 2,993 | 4,738 | 17,505 | 25,590 |
| Oct 24 | 431 | 736 | 2,613 | 30,578 | 34,358 |
| Nov 24 | 230 | 3,136 | 2,031 | 21,298 | 26,695 |
| Dec 24 | 344 | 1,790 | 1,944 | 15,643 | 19,721 |
| Jan 25 | 1,268 | 4,335 | 2,973 | 13,463 | 22,039 |
| Feb 25 | 214 | 8,635 | 3,788 | 24,021 | 36,658 |
| Mar 25 | 293 | 3,709 | 4,279 | 33,379 | 41,660 |
| Apr 25 | 346 | 3,373 | 5,137 | 26,671 | 35,527 |
| May 25 | 158 | 4,448 | 2,699 | 20,541 | 27,846 |
| Jun 25 | 225 | 3,864 | 2,940 | 18,261 | 25,290 |
| Jul 25 | 166 | 1,135 | 2,156 | 26,161 | 29,618 |
| Aug 25 | 166 | 468 | 562 | 13,114 | 14,310 |
| Sep 25 | 277 | 6,492 | 5,259 | 12,568 | 24,596 |
| Oct 25 | 307 | 1,864 | 1,005 | 37,073 | 40,249 |
| Nov 25 | 271 | 2,106 | 2,008 | 20,060 | 24,445 |
| Dec 25 | 147 | 1,903 | 1,693 | 8,274 | 12,017 |
| Jan 26 | 268 | 4,740 | 4,212 | 8,318 | 17,538 |
| Feb 26 | 304 | 3,911 | 2,926 | 35,650 | 42,791 |
| Mar 26 | 170 | 1,575 | 5,946 | 25,077 | 32,768 |
| Apr 26 | 87 | 3,685 | 4,673 | 42,520 | 50,965 |
| May 26 | 57 | 1,003 | 7,111 | 21,748 | 29,919 |
| Jun 26 | 138 | 2,317 | 4,937 | 17,964 | 25,356 |
| Jul 26 | 81 | 1,554 | 1,467 | 24,590 | 27,692 |
* Actual redemption, based on month-end data. ECB estimates in italics. Figures may not add up due to rounding. Figures are preliminary and subject to revision.
Notes: Realised redemptions may differ from estimated redemptions. As of 3 September 2024, monthly redemptions will be published at an annual frequency. To preserve the current level of information, the redemption horizon will be extended to 24 months.
Corporate Sector Purchase Programme (CSPP)
The Eurosystem conducted net purchases of corporate sector bonds under the CSPP from June 8, 2016, to December 19, 2018. From January to October 2019, reinvestments of principal payments were the sole activity. Purchases resumed from November 1, 2019, until the end of June 2022. Full reinvestments followed between July 2022 and February 2023, transitioning to partial reinvestments from March 2023 until all CSPP reinvestments were discontinued in July 2023.
Reflecting a growing emphasis on sustainability, the Eurosystem announced in July 2022 its commitment to gradually decarbonize its corporate bond holdings, aligning with the Paris Agreement goals. This commitment influences the strategy for purchase euro assets, particularly within the CSPP framework. Reinvestments under the APP were directed towards issuers demonstrating better climate performance.
Securities held under the CSPP that meet minimum credit quality standards are available for securities lending, supporting market liquidity and collateral availability.
CSPP holdings*
| EUR mil. | 282,148 |
|---|---|
| Date | 21 February 2025 |
* End of week, at amortised cost*
Historical lists of securities held under the CSPP are available by date selection on the ECB website.
Public Sector Purchase Programme (PSPP)
The PSPP involved Eurosystem net purchases of public sector securities from March 9, 2015, to December 19, 2018. Similar to other programmes, reinvestments followed from January to October 2019, with resumed purchases from November 1, 2019, to June 2022. Full reinvestments occurred from July 2022 to February 2023, then partial reinvestments from March 2023, before the discontinuation of all PSPP reinvestments in July 2023. The scale of the PSPP reflects the significant purchase euro government bonds and related securities.
The securities eligible under the PSPP include:
- Nominal and inflation-linked central government bonds
- Bonds issued by recognized agencies, regional and local governments, international organizations, and multilateral development banks located in the euro area
Government bonds and recognized agencies constitute approximately 90% of the total Eurosystem portfolio since December 2018, with international organizations and multilateral development banks comprising the remaining 10%.
PSPP securities are also available for securities lending to enhance market liquidity and collateral availability.
PSPP holdings*
| EUR millions | 2,089,679 |
|---|---|
| Date | 21 February 2025 |
* End of week, at amortised cost*
Breakdown of debt securities under the PSPP
| (EUR millions) | Cumulative net purchases as of end December 2024* | Monthly net purchases January 2025 | Cumulative net purchases as of January 2025* | WAM of PSPP portfolio holdings end December 2024** | Current WAM of PSPP portfolio holdings** | WAM of eligible universe of securities under the PSPP as at end-January 2025** |
|---|---|---|---|---|---|---|
| Austria | 64,331 | 0 | 64,331 | 7.03 | 6.95 | 8.57 |
| Belgium | 83,722 | 0 | 83,722 | 6.33 | 6.24 | 10.55 |
| Cyprus | 3,665 | 0 | 3,665 | 8.25 | 8.17 | 8.80 |
| Germany | 541,690 | -4,498 | 537,193 | 6.57 | 6.54 | 8.23 |
| Estonia | 605 | 0 | 605 | 5.95 | 5.86 | 6.76 |
| Spain | 274,164 | -6,719 | 267,445 | 7.07 | 7.18 | 8.19 |
| Finland | 39,027 | 0 | 39,027 | 7.39 | 7.30 | 8.85 |
| France | 457,953 | -252 | 457,701 | 5.99 | 5.91 | 8.63 |
| Ireland | 38,981 | 0 | 38,981 | 7.45 | 7.37 | 9.76 |
| Italy | 357,786 | -2,221 | 355,565 | 7.11 | 7.07 | 7.95 |
| Lithuania | 5,215 | 0 | 5,215 | 9.53 | 9.44 | 8.99 |
| Luxembourg | 3,566 | 0 | 3,566 | 5.00 | 4.92 | 7.84 |
| Latvia | 3,452 | -25 | 3,426 | 7.93 | 7.90 | 7.30 |
| Malta | 1,388 | 0 | 1,388 | 9.50 | 9.42 | 7.76 |
| Netherlands | 114,654 | -98 | 114,556 | 7.21 | 7.13 | 9.90 |
| Portugal | 49,546 | 0 | 49,546 | 6.78 | 6.69 | 8.54 |
| Slovenia | 10,687 | 0 | 10,687 | 7.96 | 7.88 | 9.20 |
| Slovakia | 16,251 | 0 | 16,251 | 7.34 | 7.26 | 8.62 |
| Supranationals | 242,594 | 0 | 242,594 | 8.05 | 7.96 | 9.89 |
| Total | 2,309,278 | -13,814 | 2,295,465 | 6.86 | 6.82 | 8.63 |
* Cumulative monthly net purchases figures represent the difference between the acquisition cost of all purchase operations and the redeemed nominal amounts.
*** Remaining weighted average maturity (WAM) in years.
Notes: Figures may not add up due to rounding. Figures are preliminary and subject to revision. Monthly purchase volumes are reported on a settlement basis and net of redemptions. The Eurosystem adheres to market neutrality via smooth and flexible implementation. Reinvestment of principal redemptions is distributed over the year for a regular and balanced market presence.
Asset-Backed Securities Purchase Programme (ABSPP)
The ABSPP was active in net purchases of asset-backed securities from November 21, 2014, to December 19, 2018. Reinvestments followed from January to October 2019, with resumed purchases from November 1, 2019, to June 2022. Full reinvestments took place from July 2022 to February 2023, followed by partial reinvestments from March 2023 until the programme’s reinvestments concluded in July 2023. The ABSPP represents a targeted approach to purchase euro denominated asset-backed securities to support specific market segments.
ABSPP holdings*
| EUR mil. | 5,679 |
|---|---|
| Date | 21 February 2025 |
* End of week, at amortised cost*
Covered Bond Purchase Programme 3 (CBPP3)
The third covered bond purchase programme (CBPP3) saw Eurosystem net purchases of covered bonds from October 20, 2014, to December 19, 2018. Reinvestments occurred from January to October 2019, with purchases restarting from November 1, 2019, to June 2022. Full reinvestments were implemented from July 2022 to February 2023, followed by partial reinvestments from March 2023 until all CBPP3 reinvestments ended in July 2023. CBPP3 aimed to purchase euro covered bonds to improve funding conditions for banks and support lending to the real economy.
Securities purchased under CBPP3 are available for securities lending by Eurosystem central banks, enhancing market efficiency.
CBPP3 holdings*
| EUR mil. | 242,913 |
|---|---|
| Date | 21 February 2025 |
* End of week, at amortised cost*
Terminated Programmes: Historical Context of Euro Purchases
Securities Markets Programme (SMP)
Launched on May 10, 2010, the Securities Markets Programme (SMP) was initiated to address severe tensions in specific market segments that were hindering the monetary policy transmission mechanism. Following the decision to introduce Outright Monetary Transactions (OMT) on September 6, 2012, the SMP was terminated. Securities acquired under the SMP are held until maturity. The SMP represents an earlier phase of purchase euro government bonds during a period of acute financial stress.
To maintain neutral liquidity conditions, the Eurosystem absorbed liquidity provided through the SMP via weekly liquidity-absorbing operations until June 2014. These operations were suspended in June 2014.
SMP holdings*
| EUR mil. | 1,336 |
|---|---|
| Date | 21 February 2025 |
* at amortised cost*
Total Eurosystem SMP holdings by issuer as at 31 December 2024
| Issuer country | Nominal amount (EUR billions) | Book value* (EUR billions) | Average remaining maturity (years) |
|---|---|---|---|
| Ireland | 0.6 | 0.6 | 0.2 |
| Greece | 0.7 | 0.7 | 1.5 |
| Total** | 1.4 | 1.3 | 0.9 |
* SMP holdings are valued at amortised cost.
** Totals may not add up due to rounding.
Covered Bond Purchase Programme (CBPP1)
The first covered bond purchase programme (CBPP1) was launched on July 2, 2009, and concluded as planned on June 30, 2010, reaching a nominal amount of €60 billion. Assets purchased under CBPP1 were held until maturity. CBPP1 was an initial step to purchase euro covered bonds to support the market.
Covered Bond Purchase Programme 2 (CBPP2)
In November 2011, the Eurosystem initiated the second covered bond purchase programme (CBPP2), which concluded on October 31, 2012, with a nominal amount of €16.4 billion. Assets from CBPP2 were also held until maturity. CBPP2 continued the strategy to purchase euro covered bonds during the sovereign debt crisis.
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