ECB to tighten access to loans

ECB has already wound down a massive money-printing scheme, opened the door to its first interest rate hike


Reuters March 25, 2022
European Central Bank (ECB) headquarters building is seen during sunset in Frankfurt, Germany, January 5, 2022. REUTERS

FRANKFURT:

The European Central Bank will tighten banks’ access to its liquidity from July by phasing out exceptionally easy collateral rules introduced at the onset of the coronavirus pandemic, the ECB said on Thursday.

The move marks another step towards ending the extraordinary support measures the bank deployed to cushion the economic impact of Covid-19.

The ECB has already wound down a massive money-printing scheme and opened the door to its first interest rate hike in a decade. In a sign of continued support for the euro zone’s weakest members, however, the ECB will continue to let banks post Greek government bonds as collateral despite their junk credit rating and said it reserved the right to do so whenever it sees fit. 

Published in The Express Tribune, March 25th, 2022.

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