Bond Banco BPM SpA 0.5% ( IT0005390973 ) in EUR

Banco BPM SpA

100 % ⇌

Italy

IT0005390973 ( in EUR )

0.5% per year ( payment 1 time a year)

05/12/2025 - Bond has expired

Prospectus brochure of the bond Banco BPM S.p.A IT0005390973 in EUR 0.5%, expired

100 000 EUR

500 000 000 EUR

Banco BPM S.p.A. is a major Italian banking group formed through the merger of Banco Popolare and Banca Popolare di Milano, offering a wide range of financial services to individuals, businesses, and public administrations.

The Bond issued by Banco BPM SpA ( Italy ) , in EUR, with the ISIN code IT0005390973, pays a coupon of 0.5% per year.
The coupons are paid 1 time per year and the Bond maturity is 05/12/2025

Prospectus

BANCO BPM S.P.A.
(incorporated as a joint stock company (società per azioni) in the Republic of Italy)
10,000,000,000 Covered Bond Programme
unconditionally and irrevocably guaranteed as to payments of interest and principal by
BPM Covered Bond 2 S.r.l.
(incorporated as a limited liability company in the Republic of Italy)
Except where specified otherwise, capitalised words and expressions in this Prospectus have the meaning given to them in
the section entitled "Glossary".
Under this 10,000,000,000 covered bond programme (the Programme), Banco BPM S.p.A. (Banco BPM or the Issuer or
the Bank) may from time to time issue covered bonds (the Covered Bonds) denominated in any currency agreed between
the Issuer and the relevant Dealer(s). The maximum aggregate nominal amount of all Covered Bonds from time to time
outstanding under the Programme will not exceed 10,000,000,000 (or its equivalent in other currencies calculated as
described herein).
The Covered Bonds constitute direct, unconditional, unsecured and unsubordinated obligations of the Issuer and will rank
pari passu without preference among themselves and (save for any applicable statutory provisions) at least equally with all
other present and future unsecured and unsubordinated obligations of the Issuer from time to time outstanding. In the event
of a compulsory winding-up of the Issuer, any funds realised and payable to the Bondholders will be collected by the
Guarantor on their behalf.
BPM Covered Bond 2 S.r.l. (the Guarantor) has guaranteed payments of interest and principal under the Covered Bonds
pursuant to a guarantee (the Guarantee) which is backed by a pool of assets (the Cover Pool) made up of a portfolio of
residential mortgage loans assigned and to be assigned to the Guarantor by the Seller (and/or, as the case may be, by any
Additional Seller) and of other Eligible Assets and Substitution Assets. Recourse against the Guarantor under the Guarantee
is limited to the Cover Pool.
Amounts payable under the Covered Bonds may be calculated by reference to EURIBOR, or to LIBOR, in each case as
specified in the relevant Final Terms. As at the date of this Prospectus, EURIBOR is provided and administered by the
European Money Markets Institute (EMMI), and LIBOR is provided and administered by ICE Benchmark Administration
Limited (ICE). At the date of this Prospectus, ICE is authorised as a benchmark administrator, and included on, whereas
EMMI is not included on, the register of administrators and benchmarks established and maintained by the European
Securities and Markets Authority (ESMA) pursuant to Article 36 of Regulation (EU) 2016/1011 (the Benchmarks
Regulation). As far as the Issuer is aware, the transitional provisions in Article 51 of the Benchmarks Regulation apply,
such that EMMI is not currently required to obtain authorisation or registration (or, if located outside the European Union,
recognition, endorsement or equivalence).
This document has been approved as a base prospectus issued in compliance with the Prospectus Directive 2003/71/EC, as
amended, to the extent they have been implemented in a Member State of the European Economic Area (the Prospectus
Directive) by the Commission de Surveillance du Secteur Financier (the CSSF), which is the competent authority in the
Grand Duchy of Luxembourg for the purposes of the Prospectus Directive (the Prospectus). By approving the Prospectus
the CSSF assumes no responsibility as to the economic and financial soundness of any transactions under the Programme or
the quality or solvency of the Issuer in line with the provisions of article 7 (7) of the Luxembourg Law on prospectuses for
securities. Application has been made for Covered Bonds to be admitted during the period of 12 months from the date of this
Prospectus to listing on the official list and trading on the regulated market of the Luxembourg Stock Exchange, which is a
regulated market for the purposes of Directive 2014/65/EU (as amended from time to time, the MiFID II). The Programme
also permits Covered Bonds to be issued on the basis that (i) they will be admitted to listing, trading and/or quotation by
such other or further competent authorities, stock exchanges and/or quotation systems as may be agreed with the Issuer or
(ii) they will not be admitted to listing, trading and/or quotation by any competent authority, stock exchange and/or quotation
system.

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An investment in Covered Bonds issued under the Programme involves certain risks. See "Risk Factors" for a
discussion of certain factors to be considered in connection with an investment in the Covered Bonds.
From their relevant issue dates, the Covered Bonds will be issued in dematerialised form or in any other form as set out in
the relevant Conditions and/or Final Terms. The Covered Bond issued in dematerialised form will be held on behalf of their
ultimate owners by Monte Titoli S.p.A. (Monte Titoli) for the account of the relevant Monte Titoli account holders. Monte
Titoli will also act as depository for Euroclear Bank S.A./N.V. (Euroclear) and Clearstream Banking, société anonyme
(Clearstream). The Covered Bonds issued in dematerialised form will at all times be evidenced by book-entries in
accordance with the Financial Laws Consolidation Act and with the joint regulation of the Commissione Nazionale per le
Società e la Borsa (CONSOB) and the Bank of Italy dated 13 August 2018 and published in the Official Gazette No. 201 of
30 August 2018, as subsequently amended and supplemented. No physical document of title will be issued in respect of the
Covered Bonds issued in dematerialised form. This Prospectus does not relate to the Covered Bonds which may be issued
under the Programme in any form other than dematerialised form pursuant to either separate documentation or the
documents described in this Prospectus after having made the necessary amendments.
The Covered Bonds of each Series will be subject to mandatory and/or optional redemption in whole or in part in certain
circumstances (as set out in Condition 8 (Redemption and Purchase)). Unless previously redeemed in full in accordance with
the Terms and Conditions, the Covered Bonds of each Series will be redeemed at their Final Redemption Amount on the
relevant Maturity Date (or, as applicable, the Extended Maturity Date), subject as provided in the relevant Final Terms.
As at the date of this Prospectus, payments of interest and other proceeds in respect of the Covered Bonds may be subject to
withholding or deduction for or on account of Italian substitute tax, in accordance with Italian Legislative Decree No. 239 of
1 April 1996, as amended and supplemented from time to time, and any related regulations. Upon the occurrence of any
withholding or deduction for or on account of tax from any payments under any Series of Covered Bonds, neither the Issuer
nor any other person shall have any obligation to pay any additional amount(s) to any holder of Covered Bonds of any
Series. For further details see the section entitled "Taxation".
The Covered Bonds issued under the Programme, if rated, are expected to be assigned the following credit ratings: Aa3 by
Moody's Frances SAS (Moody's or the Rating Agency). The credit rating applied for in relation to the Covered Bonds will
be issued by the Rating Agency which is established in the European Union and has been registered under Regulation (EU)
No 1060/2009 (the CRA Regulation), as resulting from the list of registered credited rating agencies (reference number
2015/1127) published on 10 July 2015 by the European Securities and Markets Authority (ESMA). A credit rating is not a
recommendation to buy, sell or hold securities and may be subject to suspension, reduction or withdrawal at any time by the
assigning rating agency. Please refer to the ESMA webpage http://www.esma.europa.eu/page/List-registeredand-certified-
CRAs in order to consult the updated list of registered credit rating agencies.
Important EEA Retail Investors. If the Final Terms in respect of any Covered Bonds include a legend entitled
"Prohibition of Sales to EEA Retail Investors", the Covered Bonds are not intended to be offered, sold or otherwise made
available to and should not be offered, sold or otherwise made available to any retail investor in the European Economic
Area (EEA). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in
point (11) of Article 4(1) of MiFID II or (ii) a customer within the meaning of Directive (UE) 2016/97 (as amended, IDD),
where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II.
Consequently, no key information document required by Regulation (EU) No 1286/2014 (the PRIIPs Regulation) for
offering or selling the Covered Bonds or otherwise making them available to retail investors in the EEA has been prepared
and therefore offering or selling the Covered Bonds or otherwise making them available to any retail investor in the EEA
may be unlawful under the PRIIPs Regulation.
MIFID II product governance / target market. The Final Terms in respect of any Covered Bonds will include a legend
entitled "MiFID II Product Governance" which will outline the target market assessment in respect of the Covered Bonds
and which channels for distribution of the Covered Bonds are appropriate. Any person subsequently offering, selling or
recommending such Covered Bonds (a distributor) should take into consideration the target market assessment; however, a
distributor subject to MiFID II is responsible for undertaking its own target market assessment in respect of the Covered
Bonds (by either adopting or refining the target market assessment) and determining appropriate distribution channels. A
determination will be made in relation to each issue about whether, for the purpose of the product governance rules under
EU Delegated Directive 2017/593 (the MiFID Product Governance Rules), any Dealer subscribing for any Covered Bonds
is a manufacturer in respect of such Covered Bonds, but otherwise neither the Arranger nor the Dealers nor any of their
respective affiliates will be a manufacturer for the purpose of the MIFID Product Governance Rules.

ARRANGER FOR THE PROGRAMME

BARCLAYS

DEALERS
BARCLAYS BANK
BANCA AKROS
BARCLAYS BANK PLC
IRELAND PLC

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The date of this Prospectus is 5 July 2019.

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This Prospectus is a base prospectus for the purposes of Article 5.4 of the Prospectus
Directive and for the purposes of giving information which, according to the particular
nature of the Covered Bonds, is necessary to enable investors to make an informed
assessment of the assets and liabilities, financial position, profit and losses and prospects of
the Issuer and of the Guarantor and of the rights attaching to the Covered Bonds.
The Issuer and the Guarantor accept responsibility for the information contained in this
Prospectus and the Final Terms for each Tranche of Covered Bonds issued under the
Programme. To the best of the knowledge of the Issuer and Guarantor (having taken all
reasonable care to ensure that such is the case), the information contained in this Prospectus
is in accordance with the facts and does not omit anything likely to affect the import of such
information.
This Prospectus is to be read and construed in conjunction with any supplements hereto, with
all documents which are incorporated herein by reference (see "Documents Incorporated by
Reference") and, in relation to any Series of Covered Bonds (as defined herein), with the
relevant Final Terms (as defined herein).
No person has been authorised to give any information or to make any representation other
than those contained in this Prospectus in connection with the issue, offering or sale of the
Covered Bonds and, if given or made, such information or representation must not be relied
upon as having been authorised by the Issuer, the Guarantor, the Representative of the
Bondholders or any of the Dealers or the Arranger, or any of their respective affiliates or
advisers. Neither the delivery of this Prospectus nor any sale or allotment made in
connection therewith shall, under any circumstances, create any implication or constitute a
representation that there has been no change in the affairs of the Issuer or the Guarantor or
in other information contained herein since the date hereof or the date upon which this
Prospectus has been most recently amended or supplemented or that there has been no
adverse change in the financial position of the Issuer or the Guarantor since the date hereof
or the date upon which this Prospectus has been most recently supplemented or that any
other information supplied in connection with the Programme is correct as of any time
subsequent to the date on which it is supplied or, if different, the date indicated in the
document containing the same.
This Prospectus does not constitute an offer of, or an invitation by or on behalf of the
Issuer, the Guarantor or the Dealers to subscribe for, or purchase, any Covered Bonds.
The distribution of this Prospectus and the offering or sale of the Covered Bonds in certain
jurisdictions may be restricted by law. Persons into whose possession this Prospectus comes
are required by the Issuer, the Dealers and the Arranger to inform themselves about and to
observe any such restriction. The Covered Bonds have not been and will not be registered
under the United States Securities Act of 1933, as amended (the Securities Act). Subject to
certain exceptions, Covered Bonds may not be offered, sold or delivered within the United
States or to US persons. There are further restrictions on the distribution of this Prospectus
and the offer or sale of Covered Bonds in the European Economic Area, including the United
Kingdom and the Republic of Italy, and in Japan. For a description of certain restrictions on
offers and sales of Covered Bonds and on distribution of this Prospectus, see Subscription
and Sale.

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The information contained in this Prospectus was obtained from the Issuer and the other
sources identified herein, but no assurance can be given by the Dealers or the Arranger as to
the accuracy or completeness of such information. The Arranger and the Dealers have not
separately verified the information contained in this Prospectus. None of the Dealers or the
Arranger make any representation, express or implied, or accept any responsibility, with
respect to the accuracy or completeness of any of the information in this Prospectus or any
document or agreement relating to the Covered Bonds or any Transaction Document. None
of the Dealers or the Arranger shall be responsible for any matter which is the subject of any
statement, representation, warranty or covenant of the Issuer contained in the Covered Bonds
or any Transaction Documents, or any other agreement or document relating to the Covered
Bonds or any Transaction Document, or for the execution, legality, effectiveness, adequacy,
genuineness, validity, enforceability or admissibility in evidence thereof. Neither this
Prospectus nor any other financial statements are intended to provide the basis of any credit
or other evaluation and should not be considered as a recommendation by any of the Issuer,
the Guarantor, the Representative of the Bondholders, the Arranger or the Dealers that any
recipient of this Prospectus or any other financial statements should purchase the Covered
Bonds. Each potential purchaser of Covered Bonds should determine for itself the relevance
of the information contained in this Prospectus, including the merits and risks involved, and
its purchase of Covered Bonds should be based upon such investigation as it deems
necessary. None of the Dealers, the Representative of the Bondholders or the Arranger
undertake to review the financial condition or affairs of the Issuer or the Guarantor during
the life of the arrangements contemplated by this Prospectus nor to advise any investor or
potential investor in Covered Bonds of any information coming to the attention of any of the
Dealers, the Representative of the Bondholders or the Arranger. None of the Arranger and
the Dealers has undertaken or will undertake any investigations, searches or other actions in
respect of any of the Eligible Assets has prepared or will undertake to prepare any report or
any other financial statement. The contents of this Prospectus should not be construed as
providing legal, business, accounting or tax advice. Each prospective investor should consult
its own legal, business, accounting and tax advisers prior to making a decision to invest in
the Covered Bonds.
In this Prospectus, unless otherwise specified or unless the context otherwise requires, all
references to "£" or "Sterling" are to the currency of the United Kingdom, "Dollars" are to
the currency of the United States of America and all references to "", "euro" and "Euro"
are to the lawful currency introduced at the start of the third stage of the European Economic
and Monetary Union pursuant to the Treaty establishing the European Community, as
amended from time to time.
For the avoidance of doubt, the content of any website referred to in this Prospectus does not
form part of the Prospectus.
Figures included in this Prospectus have been subject to rounding adjustments; accordingly,
figures shown for the same item of information may vary, and figures which are totals may
not be the arithmetical aggregate of their components.
In connection with any Tranche of Covered Bonds, one or more Dealers may act as a
stabilising manager (the Stabilising Manager). The identity of the Stabilising Manager will
be disclosed in the relevant Final Terms. References in the next paragraph to "the issue" of
any Tranche of Covered Bonds are to each Tranche of Covered Bonds in relation to which
any Stabilising Manager is appointed.

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In connection with the issue of any Tranche of Covered Bonds, the Dealer or Dealers (if any)
named as the Stabilising Manager(s) (or persons acting on behalf of any Stabilising
Manager(s)) in the applicable Final Terms may over-allot Covered Bonds or effect
transactions with a view to supporting the market price of the Covered Bonds at a level
higher than that which might otherwise prevail. However, there can be no assurance that the
Stabilising Manager(s) (or any person acting on behalf of a Stabilising Manager) will
undertake stabilisation action. Any stabilisation action may begin on or after the date on
which adequate public disclosure of the final terms of the offer of the relevant Tranche of
Covered Bonds is made and, if begun, may be ended at any time, but it must end no later than
the earlier of 30 days after the issue date of the relevant Tranche of Covered Bonds and 60
days after the date of the allotment of the relevant Tranche of Covered Bonds. Any
stabilisation action or over-allotment must be conducted by the relevant Stabilising
Manager(s) (or persons acting on behalf of any Stabilising Manager(s)) in accordance with
all applicable laws and rules.

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CONTENTS
Clause
Page
RISK FACTORS ....................................................................................................................... 1
SUPPLEMENTS, FINAL TERMS AND FURTHER PROSPECTUSES .............................. 61
STRUCTURE OVERVIEW .................................................................................................... 62
GENERAL DESCRIPTION OF THE PROGRAMME .......................................................... 67
DOCUMENTS INCORPORATED BY REFERENCE .......................................................... 84
TERMS AND CONDITIONS OF THE COVERED BONDS ................................................ 87
RULES OF THE ORGANISATION OF THE BONDHOLDERS ....................................... 145
FORM OF FINAL TERMS ................................................................................................... 175
USE OF PROCEEDS ............................................................................................................ 186
SELECTED CONSOLIDATED FINANCIAL DATA ......................................................... 189
BUSINESS DESCRIPTION OF BANCO BPM SOCIETÀ PER AZIONI .......................... 196
CREDIT AND COLLECTION POLICY .............................................................................. 244
THE GUARANTOR .............................................................................................................. 264
DESCRIPTION OF THE TRANSACTION DOCUMENTS................................................ 268
CREDIT STRUCTURE ......................................................................................................... 295
CASHFLOWS ....................................................................................................................... 303
DESCRIPTION OF THE COVER POOL ............................................................................. 310
THE ASSET MONITOR ....................................................................................................... 316
DESCRIPTION OF CERTAIN RELEVANT LEGISLATION IN ITALY.......................... 318
TAXATION ........................................................................................................................... 324
LUXEMBOURG TAXATION .............................................................................................. 336
SUBSCRIPTION AND SALE .............................................................................................. 337
GENERAL INFORMATION ................................................................................................ 342
GLOSSARY .......................................................................................................................... 347

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RISK FACTORS
Each of the Issuer and the Guarantor believes that the following factors may affect their
ability to fulfil their obligations under the Covered Bonds issued under the Programme. Most
of these factors are contingencies which may or may not occur and neither the Issuer nor the
Guarantor is in a position to express a view on the likelihood of any such contingency
occurring. In addition, factors which are material for the purpose of assessing the market
risks associated with Covered Bonds issued under the Programme are also described below.
Each of the Issuer and the Guarantor believes that the factors described below represent the
principal risks inherent in investing in the Covered Bonds issued under the Programme, but
the inability of the Issuer or the Guarantor to pay interest, principal or other amounts on or
in connection with any Covered Bonds may occur for other reasons which may not be
considered significant risks by the Issuer nor the Guarantor based on information currently
available to them or which they may not currently be able to anticipate. Prospective investors
should also read the detailed information set out elsewhere in this Prospectus and reach their
own views prior to making any investment decision.
Words and expressions defined in the "Terms and Conditions of the Covered Bonds" below
or elsewhere in this Prospectus have the same meaning in this section.
Investment Considerations relating to the Banco BPM Group
Factors that may affect the Issuer's ability to fulfil its obligations under the Covered
Bonds issued under the Programme
Risks related to the impact of global macro-economic factors, the Euro Area sovereign
debt crisis and the national and international political climate on the performance of the
Issuer and of the Banco BPM Group
Risks related to the impact of global macro-economic factors
The performance of the Banco BPM Group is influenced by: Italian and EU-wide
macroeconomic conditions, the conditions of the financial markets in general, and in
particular, by the stability and trends in the economies of those geographical areas in which
Banco BPM conducts its activity. The earning capacity and solvency of the Banco BPM
Group are affected, inter alia, by factors such as investor perception, long-term and short-
term interest rates fluctuations, exchange rates, liquidity of financial markets, availability and
costs of funding, sustainability of sovereign debt, family incomes and consumer spending,
unemployment levels, inflation and property prices. Adverse changes in these factors,
especially during times of economic and financial crisis, could result in potential losses, an
increase in the Issuer's and/or the Banco BPM Group's borrowing costs, or a reduction in
value of its assets, with possible negative effects on the business, financial condition and/or
results of operations of the Issuer and/or the Banco BPM Group.
Overall, 2017 was characterized by a global economic recovery. In the favourable
international and European scenario, Italy recorded a period of economic recovery, increasing
its GDP compared to previous recent years. Although still wide, the gap with the best
performing economies of the Eurozone was reduced in 2017.

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Subsequently, an inconclusive general election in Italy in March 2018 led to a prolonged
period of negotiation among the rival parties and the Italian president and a coalition
government was finally formed at the beginning of June 2018. This resulted in market
instability and the economic implications of the policies of the new Italian Government
remain uncertain.
In addition, a number of uncertainties remain in the current macroeconomic environment,
namely: (a) trends in the economy and the prospects of recovery and consolidation of the
economies of countries like the US and China, which have shown consistent growth in recent
years; (b) the outcome of the commercial dispute between the US and China, which could
have an effect on international trade and therefore global production; (c) future development
of the European Central Bank's (ECB) monetary policy in the Euro area, the Federal Reserve
System, and in the Dollar area, and the policies implemented by other countries aimed at
promoting competitive devaluations of their currencies; (d) the sustainability of the sovereign
debt of certain countries and related recurring tensions on the financial markets; and (e) the
consequences and potential lingering uncertainties caused by the Brexit vote.
All of these factors, in particular in times of economic and financial crisis, could result in
potential losses, an increase in the Issuer's and/or the Banco BPM Group's borrowing costs,
or a reduction in value of its assets, with possible negative effects on the business, financial
conditions and/or results of operations of the Issuer and/or the Banco BPM Group.
Risks related to the United Kingdom leaving the European Union
On 23 June 2016, the UK held a referendum on the country's membership of the European
Union (Brexit). The results of Brexit showed that the majority of people who participated,
voted to leave the European Union. The referendum does not directly bind the government to
specific actions.
On 29 March 2017 the United Kingdom notified the European Council of its intention to
withdraw from the European Union within the meaning and for the purposes of article 50(2)
of the Treaty on European Union. article 50(2) requires that, in the light of the guidelines
provided by the European Council, the Union shall negotiate and conclude an agreement with
the United Kingdom, setting out the arrangements for its withdrawal from the European
Union (the Withdrawal Agreement), taking account of the framework for its future
relationship with the Union. Article 50 requires that such Withdrawal Agreement shall be
negotiated in accordance with article 218(3) of the Treaty on the Functioning of the European
Union and concluded on behalf of the Union by the Council, acting by a qualified majority,
after obtaining the consent of the European Parliament. Under article 50(3) of the Treaty, the
EU Treaties shall cease to apply to United Kingdom from the date of entry into force of the
withdrawal agreement or, failing that, two years after the notification referred to in article
50(2), unless the European Council, in agreement with the Member State concerned,
unanimously decides to extend this period.
The United Kingdom planned to withdraw from the European Union no later than 29 March
2019, however such departure was delayed as the Parliament of the United Kingdom have so
far not agreed to the Withdrawal Agreement. As a result, the new deadline for the exit of the
United Kingdom from the European Union is 31 October 2019. However, such exit could be
delayed once again if all European countries, including the United Kingdom, were to agree to
a further extension.

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The outcomes of the negotiations around Brexit and the consequences of Brexit itself are still
uncertain, with respect to the European Union integration process, the relationship between
the United Kingdom and the European Union, and the impact on economies and European
businesses. Accordingly, there can be no assurance that the Banco BPM Group's results of
operations, business and financial condition will not be affected by market developments
such as changes in the exchange rate of the British Pound versus the Euro, and higher
financial market volatility in general due to increased uncertainty.
Risks related to the crisis of the Euro Area sovereign debt
The global financial crisis contributed to and accelerated the worsening of public debt
problems in European Union countries with large public debts and budget deficits, causing
the most damage to banks that had greater exposure to domestic sovereign debt and a
revaluation of sovereigns' credit risk. As a consequence, in several euro-area countries yield
spreads on government bonds with respect to the German Bund widened markedly and
domestic banks' funding capacity was affected, especially in the wholesale segment. The
repercussions of the global economic slowdown and market turmoil were particularly severe
in Italy.
From autumn 2011, the ECB implemented important measures to support the European
economy and financial stability, including: the SMP (Securities Market Programme) that
entails the purchase of government securities by the ECB itself; the provision of liquidity to
banks through the purchase of covered bonds, and provisions of loans to banks.
In September 2012, the ECB Council approved the plan for secondary market purchases by
the ECB of Eurozone sovereign debt securities with a maturity of between one and three
years and without setting any quantitative limit (so-called Outright Monetary Transactions).
The plan was to be complemented by the ESM's (European Stability Mechanism) measures
on the primary market upon the imposition of conditions (in the form of macroeconomic
adjustments or preventive financial assistance, being the so-called Enhanced Conditions
Credit Line or ECCL).
On 5 June 2014, the ECB announced its decision to conduct a series of Targeted Longer-
Term Refinancing Operations (TLTROs) over a period of two years, aimed at improving and
supporting bank lending to the euro area non-financial private sector. On 22 January 2015,
the ECB launched its Expanded Asset Purchase Programme (more commonly known as
Quantitative Easing), under which the ECB began purchasing euro-denominated, investment-
grade securities issued by euro area governments and European institutions up to Euro 60
billion each month. The programme was intended to be carried out until September 2016, and
in any case until there were signs of a sustained adjustment in the path of inflation or
deflation that is consistent with the aim of achieving inflation rates approaching 2%.
On 10 March 2016, with a view to further facilitating access to funding in the EU and
achieving inflation rates of 2%, the ECB announced an increase of the monthly average
amount of security purchases under "Quantitative Easing" programme, from Euro 60 billion
to Euro 80 billion, expanding the asset purchase to the bonds issued by non-financial entities
with high credit ratings, which was reduced back to Euro 60 billion from April 2017. As part
of the liquidity support action, the ECB introduced a new series of Targeted Longer-Term
Refinancing Operations (TLTRO-II) with even more favourable terms: counterparties had
access to financing for up to 30 per cent of the stock of loans eligible as at 31 January 2016

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