Outright Monetary Transactions (OMT) is a program of the European Central Bank under which the bank makes purchases ("outright transactions") in secondary, sovereign bond markets, under certain conditions, of bonds issued by Eurozone member-states. The program was presented by its supporters as a principal manifestation of Mario Draghi's (July 2012) commitment to do "whatever it takes" to preserve the euro.[1]
OMT is considered by the European Central Bank once a Eurozone government asks for financial assistance. The Eurozone has established the European Stability Mechanism and the European Financial Stability Facility bailout funds in order to meet the challenges of the European debt crisis. From these funds and through OMT, the Eurozone's central bank can, henceforth, buy government-issued bonds that mature in 1 to 3 years, provided the bond-issuing countries agree to certain domestic economic measures – the latter being the so-called term of "conditionality". The aim of the program is then to prevent divergence in short-term bond yields, and to ensure that the ECB's monetary policy is transmitted equally to all the Eurozone's member economies. The central bank notes that the OMT is meant as a means to "safeguard an appropriate monetary policy transmission and the singleness of the monetary policy". Interventions through the program are stipulated to be potentially limitless.[2]
Outright Monetary Transactions are not the same as quantitative easing (QE) operations, since, in the latter, the central banks buy bonds and, by doing so, inject liquidity into the banking system, with the aim of stimulating economic activity. The ECB has made clear[3] that the principle of "full sterilisation"[4] will apply, whereby the bank will be reabsorbing the money pumped into the system "by any means necessary". In practice, the only means of sterilisation used has been the auctioning of sufficient quantities of one-week deposits at the ECB – the same means of sterilisation that the ECB used for its previous bond-buying programme, the SMP.
^"Interview with Libération". European Central Bank. December 16, 2019.
^"Technical features of Outright Monetary Transactions". European Central Bank. September 6, 2012.
^Cite error: The named reference ecb was invoked but never defined (see the help page).
^6 September 2012 – Technical features of Outright Monetary Transactions "The liquidity created through Outright Monetary Transactions will be fully sterilised."
and 25 Related for: Outright Monetary Transactions information
OutrightMonetaryTransactions (OMT) is a program of the European Central Bank under which the bank makes purchases ("outrighttransactions") in secondary...
OutrightMonetaryTransactions case (2014) BVerfGE 134, 366 is an EU law case, concerning preliminary references to the Court of Justice of the European...
C-62/14 is an EU law case relevant for banking law which approved outrightmonetarytransactions that were needed to save the Eurozone from financial turmoil...
December 2011 and February 2012, and the announcement of the outrightmonetarytransactions (OMT) program in the summer of 2012. The ECB acted as a de facto...
August 2018. Retrieved 16 June 2012. "Technical features of OutrightMonetaryTransactions" Archived 16 November 2017 at the Wayback Machine, ECB Press...
retrain oral rest posture, swallowing patterns, and speech OutrightMonetaryTransactions, which denotes the European Central Bank's purchases of bonds...
important issues. Similarly, the German Constitutional Court in the OutrightMonetaryTransactions case referred a question for preliminary ruling on whether the...
bailout/precautionary programme from EFSF/ESM, through some yield lowering OutrightMonetaryTransactions (OMT). Ireland and Portugal received EU-IMF bailouts In November...
(controversially) as a conditional LOLR with its 2012 policy of OutrightMonetaryTransactions. In 1763, the king was the lender of last resort in Prussia;...
"the greatest central banker of modern times." Moreover, thanks to his monetary policies, he is widely considered the "saviour of the euro" during the...
Modern monetary theory or modern money theory (MMT) is a heterodox macroeconomic theory that describes currency as a public monopoly and unemployment as...
July 26, 2012 the ECB’s president Mario Draghi launched the OutrightMonetaryTransactions (OMT) Program, which led to a significant increase in the value...
Operations consist of repurchase and reverse repurchase transactions, outrighttransactions, and foreign exchange swaps. Repurchase and Reverse Repurchase...
Mechanism (ESM)" (PDF). ESM. 19 April 2013. "Technical features of OutrightMonetaryTransactions", ECB Press Release, 6 September 2012 Stephen Castle and Melissa...
exchequer, and manages the national debt. OMT (OutrightMonetaryTransactions): ECB's purchases ("outrighttransactions") in sovereign-bond secondary markets,...
of monetary financing of budget deficits (Article 123 TFEU). It must be emphasized that these bonds are purchased as part of the OutrightMonetary Transactions...
Deutscher Bundestag (2015) C-62/14 the CJEU approved the use of outrightmonetarytransactions to buy Greek government debt on secondary markets (to support...
consistency, isolation, durability) is a set of properties of database transactions intended to guarantee data validity despite errors, power failures, and...
The Bretton Woods system of monetary management established the rules for commercial relations among the United States, Canada, Western European countries...
crisis Long-term Refinancing operations Quantitative easing OutrightMonetaryTransactions Prime Minister of Italy Government 2021 Italian government crisis...
trillion break-down is as follows: $2.1 trillion in spot transactions $1.2 trillion in outright forwards $3.8 trillion in foreign exchange swaps $124 billion...
managing capital account transactions. They include outright prohibitions against some or all capital account transactions, transaction taxes on the...
increasingly Eurosceptic Thatcher announced her outright opposition to European Economic and Monetary Union (EMU), and the idea was abandoned. On 1 January...
Financial instruments are monetary contracts between parties. They can be created, traded, modified and settled. They can be cash (currency), evidence...
Global Information