Anti-fragmentation: new tool in the toolkit

Author (Corporate)
Series Title
Series Details PE 733.984
Publication Date September 2022
ISBN 978-92-846-9766-3
EC QA-09-22-528-EN-N
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With the rise in interest rates and the phasing out of ECB’s asset purchase programmes, highly indebted countries such as Italy and Greece are facing a sharper rise in their bond yields than Germany – a development often referred to as `bond market fragmentation'. In response, the Governing Council of the European Central Bank announced the Transmission Protection Instrument on 21 July 2022. This paper provides a legal and economic examination of this new monetary policy instrument. It is compared with other non-conventional instruments in the context of the Treaty framework and the doctrine of the European Court of Justice.

Table of Contents:

  • The ECB’s Transmission Protection Instrument: a legal & economic analysis | Kerstin Bernoth, Sara Dietz, Gökhan Ider & Rosa Lastr
  • The TPI: a useful step, just a step | Charles Wyplosz
  • The TPI: protecting the transmission mechanism or managing spreads? | Ignazio Angeloni, Daniel Gros & Farzaneh Shamsfakhr
  • Anti-fragmentation: an incomplete diagnosis and wrong solution | Marek Dabrowski

Further information:

This paper was provided by the Policy Department for Economic, Scientific and Quality of Life Policies at the request of the committee on Economic and Monetary Affairs (ECON) ahead of the Monetary Dialogue with the ECB President on 26 September 2022.

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