ECB Balance Sheet Plunged by €1.6 Trillion (-18%) From Peak. Bond Roll-Off Speeds Up

July 06, 2023

by Wolf Richter Wolf Street

Spooked by relentlessly raging inflation in services, ECB puts QT into higher gear.

Total assets on the ECB’s balance sheet as of June 30, which was released today, have plunged by €1.62 trillion, or by 18%, from the peak in June last year, to €7.22 trillion, the lowest level since March 2021.

The ECB had two major types of QE that are now unwinding: It offered free loans under very favorable conditions to banks, ultimately handing banks €2.22 trillion in cash to deploy. And it handed €4.96 trillion in cash at the peak to the bond market by purchasing government bonds, corporate bonds, and asset-backed securities.