In the past days, the European Central Bank (“ECB”):
(1) announced the launch of a new EUR 750 billion temporary program for the purchase of private and public sector securities to “counter the serious risks to the monetary policy transmission mechanism and the outlook for the euro area posed by the outbreak and escalating diffusion of the coronavirus, COVID-19” (so-called “Pandemic Emergency Purchase Program” or “PEPP”); and
(2) activated the supervisory and capital relief measures in favor of EU credit institutions, which amounts to €120 billion and could be used to absorb losses or potentially finance up to €1.8 trillion of lending (in addition to measures such as public guarantees provided by various Member States in favor of household and/or corporate borrowers).
This memorandum is intended to give an overview of the monetary stimulus and supervisory relief measures announced by the ECB and banking supervisors in France, Italy and Germany.
Please click here to read the full alert memorandum.