ECB Expands Euro Backstop Facility to Non-Euro Area Central Banks

The European Central Bank (ECB) has expanded its EUREP repo facility to include non-euro area central banks, providing them with a standing euro liquidity backstop.

For years, access to euros in times of crisis was a favor granted by the ECB on an ad-hoc basis. Now, it's a standard service available to all eligible central banks outside the eurozone.

The terms are set out in the ECB's press release and guideline: onboarded central banks will borrow euros against high-quality collateral at the main refinancing operations (MRO) rate plus a spread that preserves the backstop character of the facility.

Five national central banks - Deutsche Bundesbank, Banco de España, Banque de France, Banca d'Italia and De Nederlandsche Bank - will operate the facility under ECB coordination. Access is open to all non-euro area central banks unless excluded on money-laundering or sanctions grounds.

The maximum line size is EUR 50 billion per central bank, and transactions run from one day to one week, extendable.