Tomorrow, 26 July, the ECB’s governing council will gather for a rather uneventful meeting according to almost all market participants including us. What some people may have forgotten is that on this exact day, six years ago, 26 July 2012, ECB president Mario Draghi said what is likely to be the most important words in recent European monetary policy history: ‘Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough.’
Since the famous words, ECB has taken a number of initiatives, and with its boldest project, the asset purchase programme, anticipated to conclude by the end of the year, we present key charts on how the economy has evolved and how ECB has fared since then (key events on the right). The vertical line on each chart indicate the timing of the famous words.
Whatever it took – key GC meetings
- July 2012: ‘whatever it takes’.
- September 2012: OMT presented.
- July 2013: Forward guidance on rates introduced.
- June 2014: Deposit rate is lowered to -10bp.
- January 2015: PSPP announced. Starts in March 2015 and runs at least until September 2016.
- December 2015: PSPP extended to March 2017; reinvestments of principals announced.
- March 2016: Deposit rate cut to – 40bp; corporate bond purchase programme announced; TLTRO2 announced; APP purchase rate EUR80bn/m.
- December 2016: PSPP extended until December 2017; APP purchase rate EUR60bn/m from April.
- October 2017: APP extended to September 2018. Purchase rate EUR30bn/m.
- June 2018: APP ‘anticipated’ to end in December 2018. Purchase rate EUR15bn/m in Q4 18; strengthens rates forward guidance.
