The ECB Takes Further Steps to Support the Banking System; Stands By “To Do More”

The ECB's latest measures primarily consist of another sizable liquidity facility for banks and additional easing of the financing terms for exiting liquidity facilities. For all practical purposes, these improvements are tantamount to an interest rate cut. Although the Governing Council refrained from stepping up its asset purchases at this juncture, ECB President Lagarde went out of her way to stress the central bank’s readiness “to do more,” if needed. Still, the decision to refrain from including “fallen angels” in the corporate bond purchase program may serve as a disappointment to some investors.


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