The European Central Bank has announced improvements to the Eurosystem repo facility (EUREP) to increase flexibility and support for euro area monetary policy transmission, effective from the third quarter of 2026.
The Governing Council of the European Central Bank (ECB) has decided to enhance the Eurosystem repo facility for central banks (EUREP) to make it more flexible and effective in supporting the smooth transmission of euro area monetary policy.
Under EUREP, the Eurosystem provides backstop euro liquidity to non-euro area central banks against high-quality euro-denominated collateral, with appropriate risk mitigants. The updated framework introduces standing access, in principle, for all central banks, unless excluded on grounds such as money laundering, terrorist financing, or international sanctions.
The changes will enable central banks outside the euro area to address euro liquidity shortages swiftly. These updates aim to broaden the facility’s geographical reach and relevance for global holders of euro securities.
Since its introduction in 2020, the global economic environment has experienced significant structural shifts, affecting trade, financial integration, and increasing uncertainty and volatility. These shifts may lead to more frequent financial disruptions, potentially impacting euro area financial markets and the transmission of monetary policy.
Liquidity lines like EUREP help support the transmission of monetary policy by mitigating risks of disruptions in euro-denominated funding markets outside the euro area. They ensure timely and broad provision of backstop funding for central banks, especially amid increased fragmentation and uncertainty.
EUREP complements the ECB’s swap lines, which remain unchanged.
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