ECB enhances repo facility for central banks
16 February 2026 Europe
Image: olrat/stock.adobe.com
The Governing Council of the European Central Bank (ECB) has enhanced the Eurosystem repo facility for central banks (EUREP) to increase its flexibility and effectiveness 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 the grounds of, in particular, money laundering, terrorist financing, or international sanctions.
The framework will also enable central banks in jurisdictions outside the euro area to address risks of euro liquidity shortages swiftly — with these changes aiming to make the facility more flexible, broader in terms of its geographical reach, and more relevant for global holders of euro securities.
According to the ECB, since EUREP was first introduced in 2020, the world economy has undergone profound structural shifts related to geopolitics and changes in the international financial system.
These shifts have altered the dynamics of global trade and financial integration and suggest that the macroeconomic and financial environment will remain uncertain and potentially more volatile, with more frequent financial disruptions and possible knock-on effects on euro area financial markets having the potential to hamper the smooth transmission of monetary policy.
Liquidity lines such as EUREP help to support the smooth transmission of monetary policy in the euro area by helping to mitigate potential negative spillover effects on euro area financial market conditions, by addressing risks of disruptions in euro-denominated funding markets outside the euro area.
In the context of greater fragmentation and uncertainty, Eurosystem liquidity facilities like EUREP will continue to ensure the timely, consistent, and broad provision of backstop funding for central banks, says the ECB.
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 the grounds of, in particular, money laundering, terrorist financing, or international sanctions.
The framework will also enable central banks in jurisdictions outside the euro area to address risks of euro liquidity shortages swiftly — with these changes aiming to make the facility more flexible, broader in terms of its geographical reach, and more relevant for global holders of euro securities.
According to the ECB, since EUREP was first introduced in 2020, the world economy has undergone profound structural shifts related to geopolitics and changes in the international financial system.
These shifts have altered the dynamics of global trade and financial integration and suggest that the macroeconomic and financial environment will remain uncertain and potentially more volatile, with more frequent financial disruptions and possible knock-on effects on euro area financial markets having the potential to hamper the smooth transmission of monetary policy.
Liquidity lines such as EUREP help to support the smooth transmission of monetary policy in the euro area by helping to mitigate potential negative spillover effects on euro area financial market conditions, by addressing risks of disruptions in euro-denominated funding markets outside the euro area.
In the context of greater fragmentation and uncertainty, Eurosystem liquidity facilities like EUREP will continue to ensure the timely, consistent, and broad provision of backstop funding for central banks, says the ECB.
NO FEE, NO RISK
100% ON RETURNS If you invest in only one securities finance news source this year, make sure it is your free subscription to Íø±¬³Ô¹Ï Finance Times
100% ON RETURNS If you invest in only one securities finance news source this year, make sure it is your free subscription to Íø±¬³Ô¹Ï Finance Times
