ECB's Mersch: Flexibility embedded in PEPP cannot be unconstrained

"The Pandemic Emergency Purchase Programme's (PEPP) flexibility should not undermine the safeguards and limits set by the European Central Bank (ECB), ECB Executive board member Yves Mersch said on Monday, per Reuters.

Additional takeaways

"PEPP purchases are separate from and cannot be consolidated with APP purchases."

"We may also decide to discontinue some of the exceptional  supervisory measures."

"The flexibility embedded in the PEPP cannot be unconstrained."

"Unless we conclude that the banks’ capital projections remain clouded by exceptionally high uncertainty, we should revert to assessing the planned distribution of dividends on a bank-by-bank basis."

Market reaction

The EUR/USD pair edged lower in the last hour and was last seen losing 0.12% on a daily basis at 1.1633.