European Central Bank Statement comparison — 30 April 2020 vs 10 September 2020

This European Central Bank statement comparison covers 30 April 2020 and 10 September 2020. Overall, the newer document was broadly unchanged. The ECB held steady with no new easing measures, keeping rates and asset purchase programs at existing levels. This signals a wait-and-see posture, with the committee likely to monitor the economic recovery before adjusting policy further.

What changed

Broadly unchanged. The ECB held steady with no new easing measures, keeping rates and asset purchase programs at existing levels. This signals a wait-and-see posture, with the committee likely to monitor the economic recovery before adjusting policy further.

Inflation — Little changed. No prior inflation passage to compare; current statement reaffirms symmetric inflation target without material change in assessment.
Labour Market — Little changed. No labour market passages in either document; no shift detectable.
Rate Path — Little changed. Forward guidance on rates is unchanged from prior, and no new rate actions were taken; the prior document's easing measures are now in effect but not expanded.
Balance Sheet — Little changed. The PEPP envelope and APP pace are maintained with the same flexibility language; prior readiness to increase size is not acted upon, leaving the stance unchanged.

Key wording

30 April 2020

the Governing Council decided to reduce the interest rate on TLTRO III operations during the period from June 2020 to June 2021 to 50 basis points below the average interest rate on the Eurosystem’s main refinancing operations prevailing over the same period. Moreover, for counterparties whose eligible net lending reaches the lending performance threshold, the interest rate over the period from June 2020 to June 2021 will now be 50 basis points below the average deposit facility rate prevailing over the same period.
rate path: Substantial further easing of TLTRO III terms; effective rate can go as low as -1% for banks meeting lending thresholds.

A new series of non-targeted pandemic emergency longer-term refinancing operations (PELTROs) will be conducted to support liquidity conditions in the euro area financial system and contribute to preserving the smooth functioning of money markets by providing an effective liquidity backstop. They will be carried out as fixed rate tender procedures with full allotment, with an interest rate that is 25 basis points below the average rate on the main refinancing operations prevailing over the life of each PELTRO.
rate path: New liquidity backstop at negative rates reinforces accommodative stance.

These purchases will continue to be conducted in a flexible manner over time, across asset classes and among jurisdictions.
rate path: Flexibility allows ECB to adjust allocation as needed, key for market expectations.

The Governing Council will conduct net asset purchases under the PEPP until it judges that the coronavirus crisis phase is over, but in any case until the end of this year.
rate path: Sets minimum duration for PEPP, with open-ended condition on crisis phase.

net purchases under the asset purchase programme (APP) will continue at a monthly pace of €20 billion, together with the purchases under the additional €120 billion temporary envelope until the end of the year.
rate path: Continued APP at steady pace alongside PEPP maintains significant QE footprint.

The Governing Council expects the key ECB interest rates to remain at their present or lower levels until it has seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2% within its projection horizon, and such convergence has been consistently reflected in underlying inflation dynamics.
rate path: Rate forward guidance conditional on inflation convergence; explicitly allows for further rate cuts.

10 September 2020

The interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.50% respectively.
rate path: No change in key rates, as widely expected.

The Governing Council expects the key ECB interest rates to remain at their present or lower levels until it has seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2% within its projection horizon, and such convergence has been consistently reflected in underlying inflation dynamics.
rate path: Opens door to rate cuts if inflation does not converge; conditions are demanding.

The Governing Council will continue its purchases under the pandemic emergency purchase programme (PEPP) with a total envelope of €1,350 billion. These purchases contribute to easing the overall monetary policy stance, thereby helping to offset the downward impact of the pandemic on the projected path of inflation.
balance sheet: Reaffirms large-scale asset purchases to support inflation.

The purchases will continue to be conducted in a flexible manner over time, across asset classes and among jurisdictions. This allows the Governing Council to effectively stave off risks to the smooth transmission of monetary policy.
balance sheet: Flexibility to address fragmentation and transmission risks, reassuring markets.

The Governing Council will conduct net asset purchases under the PEPP until at least the end of June 2021 and, in any case, until it judges that the coronavirus crisis phase is over.
balance sheet: Minimum duration but conditional on crisis, keeping open-ended support.

Net purchases under the asset purchase programme (APP) will continue at a monthly pace of €20 billion, together with the purchases under the additional €120 billion temporary envelope until the end of the year.
balance sheet: APP pace unchanged, temporary envelope continues as announced.

Official documents

Background reading

30 April 2020 statement · 10 September 2020 statement · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology