Published on Monday, March 16, 2020

ECB reaction

Last Thursday, a day of panic across markets with plummeting stock markets and investors seeking refuge in low-risk assets, and after the World Health Organization had declared COVID-19 a global pandemic, the ECB strengthened its efforts in terms of monetary stimulus in two ways.

Key points

  • Key points:
  • The first measure was to ensure liquidity to financial entities at more favorable terms to keep the economy flowing for both families and companies.
  • The ECB improved conditions so that banks can request more liquidity under the TLTRO-III program at a lower cost and with eased conditions.
  • The second measure was to substantially increase the current assets purchases (QE) program by EUR 120 billion this year, in addition to the existing EUR 20 billion.

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