ECB Boosts Crisis Stimulus With More Bond-Buying, Bank Loans

The European Central Bank escalated its efforts to shield the euro zone from a possible double-dip recession with another burst of monetary stimulus to lock in low interest rates at least until the pandemic crisis is over.

Policymakers increased and extended emergency bond purchases, and approved more long-term loans on cheap terms for another year. The euro jumped.


- The Pandemic Emergency Purchase Program was increased by 500 billion euros ($606 billion) to 1.85 trillion euros, and extended it by nine months to at least the end of March 2022. Reinvestments will be made until at least the end of 2023.

- An older bond-buying program will continue to run at a monthly pace of 20 billion euros until shortly before interest rates rise.

- Favorable terms on the ECB's TLTRO-III bank lending program will be extended by 12 months to June 2022, and the ECB will make three new offers under the program next year. Total amount banks can borrow raised to 55% of banks' stock of eligible loans, from 50%.





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