). in total, based on available information, eurosystem staff estimate that the gross issuance of bonds – excluding bills – by the central governments of germany, france, italy, spain and the netherlands will be well in excess of one trillion euro this year alone. these figures will likely increase further in the coming weeks and months. such significant and concentrated issuance naturally implies that investors require a higher premium for absorbing the additional duration risk on their balance sheets. this is where our purchase programmes, and the pepp in particular, kick in. by absorbing a substantial fraction of the additional duration risk on our balance sheet, our measures have an important stabilising impact on the euro area sovereign yield curve. evidence from term structure models corroborates this view ( slide 3, right chart ). in germany, for example, we had seen a sudden and sharp turnaround in term premia ( the red bars in the chart ), and hence in yields, in the run - up to the pepp announcement, reflecting expectations of a strong surge in issuance. the pepp interrupted and reversed this dynamic, thereby safeguarding the financial conditions that are consistent with our primary mandate. but because of the wide uncertainty around the ultimate economic and fiscal effects of this crisis, and the likely substantial additional issuance needed in coming years, yields have not fully reversed and remain above pre - corona levels. these effects are likely to have been aggravated by the second factor – the challenging market liquidity. although the announcement of the pepp triggered an improvement from previously impaired levels, liquidity is still far from normal. bid - ask spreads, even in deep liquid markets, such in the 3 / 6 bis central bankers'speeches german bund market, remain well above the norm ( slide 4, left chart ). eurosystem portfolio managers often report a limited amount of offers and sometimes no sufficient quotes for bonds, in particular for those issued by some smaller jurisdictions. to improve liquidity further and reduce volatility, we decided to use the full joint flexibility of our asset purchase programmes, both the app and the pepp, and increased our presence in the market by frontloading purchases measurably ( slide 4, right chart ). current weekly purchase volumes far exceed the levels we have implemented over the lifetime of the app so far, even compared to the period when purchases were running at a monthly pace of €80 billion in 2016. and the eurosystem has been using all the inbuil

and the large remaining uncertainty. our measures in support of bank lending, together with the loan guarantee schemes provided by governments, attempt to mitigate this friction. in particular, for counterparties maintaining their levels of credit provision to the real economy over a defined horizon covering the outbreak of the pandemic, the rate applied in our targeted longer - term refinancing operations ( tltro - iii ) can be as low as 25 basis points below the average interest rate on the deposit facility, which currently implies a rate of – 75 basis points. by providing strong monetary incentives for banks to maintain their lending to the real economy under our tltro - iii, we contribute to more favourable bank lending conditions, which tend to exhibit a much larger degree of inertia than market - based funding costs. in italy, for example, bank lending conditions for firms remained remarkably resilient in recent years despite significant swings in market - based funding conditions of the sovereign, banks and firms. again, our measures can provide a valuable bridge to the future and help keep aggregate external funding costs of firms stable until the economy recovers and uncertainty diminishes further. two other features of our package reinforce the bank lending channel. these are, first, our plain - vanilla longer - term refinancing operations ( ltros ), which provide abundant liquidity to banks at favourable rates at a time when term funding has become scarce and more expensive. the second feature relates to the easing in collateral standards for lending operations. we now accept a much broader set of assets as collateral, including loans of small size to small and medium - sized enterprises ( smes ) or even self - employed workers, and we accept them at more favourable conditions. this increases the liquidity of the asset side of banks ’ balance sheets, and thereby provides further incentives to extend credit to the real economy, even during the current challenging period. macroeconomic implications of the pandemic taken together, and in conjunction with the actions taken at european and national level, our measures provide tangible support to the euro area economy at a time when uncertainty looms large and downside risks to the medium - term inflation outlook have increased. ecb staff is currently assessing the extent to which the current crisis will affect the likely future inflation and growth trajectories. in the short run, headline inflation can be expected to drop measurably on the back of the decline in energy prices. the march hicp release was a harbinger