Vitor Constâncio, vice president of the European Central Bank, has said that the stock of covered bonds that comply with the requirements laid out by the ECB for eligibility for its third covered bond purchase programme (CBPP3) is Eu600bn.

Constâncio made the comments at an ECB workshop on its non-standard monetary policy measures in Frankfurt on Monday. Most of his comments explained the ECB’s thinking in relation to issues such as its TLTROs and the parallel ABS and covered bond purchase programmes, and he also discussed the market’s reaction to the measures.

However, he gave the first hard numbers from the ECB on the amounts of securities outstanding it sees outstanding and eligible for the two purchase programmes — neither of which have a defined size.

“In the case of covered bonds, only half of them are eligible: from a total of Eu1.2tr, the stock of covered bonds that comply with all our requirements is reduced to about Eu600bn,” he said. “The total existing stock of ABS corresponds to Eu690bn of which around Eu400bn qualify as purchasable assets.”

He gave no indication of what proportion of these covered bonds the ECB would buy. However, he addressed market comments questioning how much the ECB might be able to buy.

“Notwithstanding these restrictions, the overall purchasable amount of ABSs and covered bonds is sufficient to ensure that asset purchases can be carried out on a large scale,” said Constâncio. “We are, of course, aware that the amounts that we will be able to buy will be lower than the theoretical amount.

“After all, present holders, banks and non-banks must be willing to sell these securities – a willingness that relates to many factors, including their assessment of the risk/return prospects of alternative uses for the cash they would get.”

A covered bond analyst said it was “good to hear” that Constâncio’s acknowledgement of the limits on what it will be able to purchase, with market participants having been concerned at the extent to which the ECB will squeeze the market and crowd out regular investors.

Analysts nevertheless queried the Eu600bn figure, suggesting that while some of the ECB’s criteria for CBPP3 announced last Thursday cut eligible outstandings towards Eu800bn, the reason why a further Eu200bn would be ineligible were unclear.