Let me remind you that the ECB was the first major central bank to hold press conferences on its monetary policy decisions. The Economic Bulletin provides a comprehensive account of the economic and monetary analyses supporting the Governing Council’s assessments. In 2015, we took another important step: we started publishing accounts of the monetary policy meetings of the Governing Council, as an additional means to explain the deliberation process that leads to our actions. Overall, the steps that the ECB took to enhance transparency have been acknowledged in a report released this week by Transparency International EU. 8 Concerning monetary policy communication, it notably commends our decision to publish regular accounts of the Governing Council’s monetary policy discussions. By explaining the rationale behind our policy decisions, the accounts also show how the measures we take are aligned with our mandate of maintaining price stability. This is important, because some unconventional monetary policy measures have been challenged on the grounds that they could be serving other policy objectives. To elaborate further on this, I will take a few examples of monetary policy measures that some have perceived to be fiscal or quasi-fiscal measures. It is imperative to be fully transparent on such measures and dispel any doubts about their motivation and their effect on price stability. Safeguards against encroachment on the area of fiscal responsibilities are extremely important. Conflicts with the price stability objective could emerge from monetary operations that support unsustainable government finances or insolvent financial institutions.

Moreover, the extra exposure to any single country that the Eurosystem might acquire as a consequence of OMT activation would be secured by the country’s strict obligations arising from the European Stability Mechanism (ESM) macroeconomic adjustment programme to which the country would have to submit as a precondition. It is worth noting that in June 2015 the European Court of Justice ruled that, given the strict modalities for activation, OMTs fall within the scope of the ECB’s mandate and include sufficient safeguards to avoid monetary financing. A number of safeguards apply to public sector bond purchases under the PSPP too. Such purchases have a monetary policy purpose which is different from the one that applies to OMTs and are specifically aimed at bringing inflation back to our medium-term objective in a situation in which our key interest rates are at levels that can hardly be reduced much further. The modalities are exclusively governed by the primary objective of price stability and are decided in full independence, irrespective of developments in other policy areas. The size and duration of the PSPP are calculated to achieve progress towards the ECB’s inflation objective. The effectiveness of the tool is rooted in two important features of the financial system. First, government bond yields are the benchmark indicator for pricing a large set of private debt instruments. Second, government bond markets are deep and liquid. Interventions in these markets can initiate a process of portfolio rebalancing with significant secondary effects on broad financing conditions.