The Eurosystem balance sheet is the combined total assets of the ECB and the national central banks of the eurozone. When the central bank buys bonds or lends to banks, it creates new central-bank money and its balance sheet grows.
Why it ballooned
Through quantitative easing (large-scale asset purchases) from 2015, and again massively during the pandemic from 2020, the balance sheet expanded to a size unimaginable in the euro's early years. From 2022 the ECB began shrinking it again ("quantitative tightening").
Why it matters
It is the clearest single gauge of how much money the central bank has injected.
Rapid expansion is closely tied to the money-supply growth and asset-price moves discussed in our debasement explainer.
Unwinding it removes liquidity and can push up bond yields.
Source: ECB, weekly consolidated financial statement.