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Will Europe’s New TPI Be an ATM?

One reason why the European Central Bank's earlier asset-purchase program was never used is that fiscally fragile governments were reluctant to submit to its robust eligibility requirements. But following the rollout of a new program that comes with much looser conditions, the balance has shifted.

NEW YORK – It has finally arrived. The European Central Bank has launched a Transmission Protection Instrument (TPI) to prevent monetary policy fragmentation within the eurozone. Announced just after the ECB Governing Council’s July 21 meeting, the TPI has overshadowed the news that the ECB will raise its policy rate by 50 basis points, which is more than expected but less than the macroeconomic situation and the price stability mandate demand.