European Central Bank Announces $817 Billion Stimulus Plan To Counter Economic Risk Posed By Coronavirus

The European Central Bank (ECB) announced a public and private bond-buying program worth 750 billion euros ($817 billion) to counter the risks posed by the coronavirus pandemic to its monetary policy.

"The Governing Council of the ECB is committed to playing its role in supporting all citizens of the euro area through this extremely challenging time," the bank said in a statement on Wednesday night, adding that it "will do everything necessary within its mandate".

The plan comes as the global coronavirus death toll was nearly 9,000, with 209,265 cases.

Purchases made under the new Pandemic Emergency Purchase Program "will include all the asset categories eligible under the existing asset purchase program", Efe news quoted the statement as saying.

The Governing Council will end the program "once it judges that the coronavirus crisis phase is over, but in any case not before the end of the year", the ECB added.

The purchases will be made in a flexible manner to allow for "fluctuations in the distribution of purchase flows over time, across asset classes and among jurisdictions", according to the bank.

The allocation of purchases of government bonds under the program will continue to be guided by the respective national central banks'' subscription to the ECB's capital key, as is done in other bond-buying programs.

Meanwhile, the ECB will "expand the range of eligible assets under the corporate sector purchase program to non-financial commercial paper" making all commercial papers of sufficient credit quality eligible for purchase under that program.

It also promised to "ease the collateral standards by adjusting the main risk parameters of the collateral framework" and include claims pertaining to corporate sector financing to ensure "counterparties can continue to make full use of the Eurosystem''s refinancing operations".

The ECB promised to ensure that all sectors of the economy including families, firms, banks and governments "can benefit from supportive financing conditions that enable them to absorb this shock".

"The Governing Council is fully prepared to increase the size of its asset purchase programs and adjust their composition, by as much as necessary and for as long as needed," the statement said.

The ECB said it would explore all options and contingencies to support the economy and expressed its willingness to revise some of its self-imposed limits that might come in the way of actions the entity needed to take in order to fulfil its mandate.

"The ECB will not tolerate any risks to the smooth transmission of its monetary policy in all jurisdictions of the euro area," the statement added.

(This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.)