March 19, 2020 / 8:22 AM / 23 days ago

FACTBOX-ECB measures to stem economic rout

FRANKFURT, March 19 (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.

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 ($1.20 trillion) 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. ($1 = 0.9204 euros) (Reporting by Balazs Koranyi, Editing by William Maclean)

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