mros ” stands for “ main refinancing operations ”, “ ltros ” for “ longer - term refinancing operations ”, “ app ” for “ asset purchase programme ”, “ tltros ” for “ targeted longer - term refinancing operations ” and “ pepp ” for “ pandemic emergency purchase programme ”. monthly data. the latest observations are for july 2020. taking stock almost six months after the introduction of our measures, the evidence suggests that the policy package has stabilised markets, protected credit provision and supported the recovery. of course, across all dimensions, fiscal policies have also played a vital role and there have been powerful complementarities between monetary and fiscal policies during this period. i will return to the fiscal policy contribution later on. since its announcement in march, the pepp has acted as a powerful market - stabilising force. in the euro area, sovereign yields play a pivotal role in the transmission of monetary policy, since these affect the funding costs of corporates, households and banks ( as well as governments, of course ). chart 3 shows that the decline in the gdp - weighted average sovereign yield has been substantial. the reduced dispersion in sovereign bond yields is also due to the profound change in the european fiscal landscape, as reflected in the far - reaching agreement at the july european council meeting. chart 3 euro area sovereign yields ( cumulated changes since 1 february 2020, percentage points ) sources : bloomberg and ecb calculations. note : the latest observations are for 21 august 2020. the stabilisation of markets is also visible in the balance of payments data as shown in chart 4. in relation to foreign assets, the initial retrenchment has been reversed, with increasing net purchases of foreign assets by domestic investors in both less vulnerable and more vulnerable countries. in relation to foreign liabilities, the scale of net selling by foreign investors of the debt securities issued by more vulnerable countries has steadily declined, with a return to net inflows in the june data. chart 4 cross - border portfolio investment flows ( monthly flows as a percentage of each group ’ s aggregate gdp ) sources : ecb and eurostat. notes : data recorded on the basis of the sixth edition of the imf balance of payments and international investment position manual ( bpm6 ). averages calculated from january 2008 to june 2020. “ less vulnerable ” countries are austria, belgium, finland, france, germany and the netherlands ; “ more vulnerable ”

speech the pandemic emergency : the three challenges for the ecb speech by philip r. lane, member of the executive board of the ecb, at the jackson hole economic policy symposium, federal reserve bank of kansas city “ navigating the decade ahead : implications for monetary policy ” 27 august 2020 today, i will discuss the monetary policy measures taken by the ecb in response to the pandemic shock, take stock of the progress to date and outline the main challenges that lie ahead. the pandemic : the three challenges for the ecb the nature of the pandemic shock called for an extraordinary policy response. from the outset, there were three challenges for the ecb : ( i ) to stabilise markets ; ( ii ) to protect credit supply ; and ( iii ) to neutralise the pandemic - related downside risks to the inflation path. tackling the first pair of challenges is needed in order to achieve the inflation aim, since it is problematic to run an effective monetary policy under conditions of market instability or a credit crunch. as is shown in chart 1, the ecb adopted a comprehensive package of crisis measures over a number of months in order to address these three challenges. chart 1 overview of the ecb policy measures taken since the outbreak of the covid - 19 crisis source : ecb. notes : * the interest rates on the lending programmes are linked to the key ecb interest rates. the lending performance for the temporary rate reduction of tltros is targeted towards the pandemic period. the ecb reconfirmed its forward guidance on the path of policy interest rates and the asset purchase programme ( app ) throughout this period. the governing council expects the key ecb rates to remain at current or lower levels until the governing council has seen the inflation outlook robustly converge to a level that is below, but close to, 2 percent, and such convergence has been consistently reflected in underlying inflation dynamics. the governing council also expects net purchases under the app to continue at a monthly pace of €20 billion for as long as necessary to reinforce the accommodative impact of its policy rates, and to end shortly before the governing council starts raising the key ecb interest rates. in addition, the governing council intends to continue reinvesting, in full, the principal payments from maturing securities purchased under the app for an extended period of time past the date when the governing council starts raising the key ecb interest rates, and in