European Central Bank announces 750-bln-euro pandemic emergency purchase program

Daniel Fowler
March 22, 2020

Seemingly taking back those comments after a public rebuttal by the ECB, Holzmann, a member of the rate-setting Governing Council, published a short statement to say that monetary policy "has by no means" reached its limits.

The European Central Bank (ECB) on Wednesday announced a new temporary asset purchase program covering private and public sector securities that has an overall envelope of 750 billion euros (819 billion USA dollars) to counter the novel coronavirus risks.

Under the bond-buying scheme, the European Central Bank will buy up government and corporate debt from countries across the Eurozone, including debt from Greece - the country which was excluded from previous European Central Bank bond purchases due to its low credit rating.

French President Emmanuel Macron said he fully supported the measures.

The remarks echoed the legendary words of her predecessor Mario Draghi who in 2012 vowed to do "whatever it takes" to preserve the euro at the height of the region's sovereign debt crisis. Global stocks have been continuing their freefall despite Western governments pledging billions of dollars to help businesses and citizens get through the pandemic.

The ECB's announcement of its plans for a bond-buying spree seem to have comforted markets with the Italian 10-year yield falling to 1.85% on Thursday.

Crucially, the European Central Bank said it was prepared to increase the size and duration of its purchases if necessary and review any constraints that stand in its way - a likely reference to a cap on owning more than a third of any country's debt.

Although the ECB said it would still buy government bonds according to each country's shareholding in the bank, the so-called capital key, it would also be flexible and may deviate from this rule.

COVID-19 communities to be kept under wraps, public health officer says
In regards to the measures recently taken, Dix reminds residents that these are not suggestions at this point, they are orders. A total of 424 people in B.C. have tested positive for the virus, with a total to 27 in Interior Health cases.

(3) To ease the collateral standards by adjusting the main risk parameters of the collateral framework.

"The ECB will ensure that all sectors of the economy can benefit from supportive financing conditions that enable them to absorb this shock", the central bank said in a release.

On Sunday the Fed cut interest rates nearly to zero and launched a $ 700 billion (£ 604bn) stimulus program.

Australian markets also notched up small gains as traders awaited similar emergency moves by the country's central bank later Thursday.

Instead, the Frankfurt institution announced an extra 120 billion euros in QE this year, on top of its current 20 billion a month.

Despite news of automakers closing factories around the world, Nissan shares raced ahead by more than six percent, with rivals Toyota and Honda also climbing sharply.

"This applies equally to families, firms, banks, and governments", it added.

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