March 19, 2020 / 8:43 AM / 20 days ago

Factbox - ECB measures to stem economic rout

FRANKFURT (Reuters) - The European Central Bank has taken a string of measures to stem an economic meltdown caused by coronavirus epidemic, promising to do everything necessary to hold the euro together.

FILE PHOTO: The European Central Bank (ECB) logo is pictured before a news conference on the outcome of the meeting of the Governing Council in Frankfurt, Germany, January 23, 2020. REUTERS/Ralph Orlowski/File Photo

The following lists the measures it took in two separate meetings plus a concerted step with the world’s biggest central banks.

-The ECB agreed to boost asset purchases to about 1.1 trillion euros (1.04 trillion pounds) this year. The buys include 20 billion euros a month as part of its already running quantitative easing scheme, a one-off 120 billion euro increase in the purchases and another one off 750 billion euros in a Pandemic Emergency Purchase Programme.

-The bank said it was willing to skew purchases in the 750 billion euro scheme based on market conditions and did not commit a previous rule requiring purchases according to each country’s shareholding in the bank. This allows the ECB to stem the yield rise on the periphery

-It made it clear that its “self-imposed” limit to buy no more than a third of each country’s debt may be revised and it would not tolerate any risks to the smooth transmission of its monetary policy.

-Greek debt is included in the purchases for the first time.

-Commercial paper will be included for the first time.

-Rates on a standing targeted-longer term refinancing operation (TLTRO) are cut by 25 basis points to as low as minus 0.75% and a new longer-term refinancing operation directed at smaller businesses is launched. Easing its rules, the ECB also allowed banks to borrow more in the TLTRO operation.

-In a coordinated step with other big central banks, the ECB said would offer weekly US dollar operations with 84-day maturity in addition to existing 1-week operations

-Eased its collateral standards in its refinancing operation.

-Through its supervision arm, the ECB also provided relief to lenders through temporary changes in the composition of Pillar 2 capital requirements.

Reporting by Balazs Koranyi, Editing by William Maclean

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