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Our response to the coronavirus pandemic

We at the ECB have put in place a set of monetary policy and banking supervision measures to mitigate the impact of the coronavirus pandemic on the euro area economy and to support all European citizens.

“Extraordinary times require extraordinary action. There are no limits to our commitment to the euro. We are determined to use the full potential of our tools, within our mandate.”

Christine Lagarde, President of the ECB

Our measures to support the euro area economy

Helping the economy absorb the shock of the current crisis

The €1,850 billion pandemic emergency purchase programme (PEPP) aims to lower borrowing costs and increase lending in the euro area. This in turn should help citizens, firms and governments get access to funds they may need to weather the crisis. This programme complements the asset purchase programmes we have had in place since 2014.

We buy several different kinds of assets in this programme. For example, when we buy bonds directly from banks, we make more funds available that they can lend to households or businesses. We can also buy companies’ bonds, giving them an additional source of credit. Both kinds of purchases help boost spending and investment, with the aim of supporting economic growth.

Keeping borrowing affordable

We have kept our key interest rates at historically low levels so borrowing costs remain low.

Our rates impact how much it costs to take out a loan. Low rates make it easier for people and companies to borrow funds, and should support spending and investment.

Supporting access to credit for firms and households

We have increased the amount of money that banks can borrow from us and made it easier for them to borrow specifically to make loans to those hardest-hit by the spread of the virus, including small and medium-sized firms. One of the ways we have made borrowing easier is by easing our standards for the collateral that banks give us as a form of insurance when we lend to them. We are temporarily expanding the list of assets that banks can use as collateral. We are also being less strict with the measure we apply to determine these assets’ value (known as a “haircut”).

Ensuring short-term concerns do not prevent lending

In times of great uncertainty, banks may find it harder to secure funds for short-term needs. We aim to help smooth over any temporary funding issues for solvent banks by offering immediate borrowing options at favourable rates. This support helps banks continue granting loans to citizens and firms in need.

Increasing banks’ lending capacity

We are being temporarily less strict about the amount of funds, or “capital”, that banks are required to hold as a buffer for difficult times. We are also giving banks more flexibility on supervisory timelines, deadlines and procedures.

All of these measures help euro area banks focus on playing their vital role as lenders during this extraordinary period. Banks are expected to use any freed-up funds to absorb losses and support the economy, and not to pay out dividends.

Preserving financial stability through international cooperation

Central banks around the world hold reserves of currencies that are not their own. This is because their domestic banks also do business in these currencies, and thus sometimes require foreign-currency loans in the course of daily business.

In times of great uncertainty, customers’ demand for foreign currency assets can increase. If banks do not have enough foreign currency reserves on hand to meet increased demand, markets can become unstable. So central banks have established so-called currency swap lines. These swap lines let central banks of one country exchange their national currency reserves for those of the central bank of another country – thus ensuring that central banks can meet increased demand.

We have recently reactivated swap lines and enhanced existing swap lines with central banks across the globe in response to the current difficult situation.

Staying ahead of the learning curve

Watch our research seminars on coronavirus

Battling new challenges requires insights from research. That’s why we invite leading academics from the fields of economics, epidemiology, demography, finance, and public policy to offer their views on the crisis and the implications of the pandemic for central banks in the ECB’s COVID-19 webinars.

COVID-19 webinar playlist on YouTube Upcoming conferences and seminars

Looking for the latest on coronavirus?

12 January 2021
Isabel Schnabel: Interview with Der Standard
Interview with Isabel Schnabel, Member of the Executive Board of the ECB, conducted by Andras Szigètvari on 7 January 2021 und published on 12 January 2021
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No. 2510
11 January 2021
Nowcasting in a pandemic using non-parametric mixed frequency VARs


JEL Classification

C11 : Mathematical and Quantitative Methods→Econometric and Statistical Methods and Methodology: General→Bayesian Analysis: General

C32 : Mathematical and Quantitative Methods→Multiple or Simultaneous Equation Models, Multiple Variables→Time-Series Models, Dynamic Quantile Regressions, Dynamic Treatment Effect Models, Diffusion Processes

C53 : Mathematical and Quantitative Methods→Econometric Modeling→Forecasting and Prediction Methods, Simulation Methods

E37 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Forecasting and Simulation: Models and Applications


This paper develops Bayesian econometric methods for posterior inference in non-parametric mixed frequency VARs using additive regression trees. We argue that regression tree models are ideally suited for macroeconomic nowcasting in the face of extreme observations, for instance those produced by the COVID-19 pandemic of 2020. This is due to their flexibility and ability to model outliers. In an application involving four major euro area countries, we find substantial improvements in nowcasting performance relative to a linear mixed frequency VAR.

No. 2507
18 December 2020
The Covid-19 crisis and consumption: survey evidence from six EU countries


JEL Classification

D12 : Microeconomics→Household Behavior and Family Economics→Consumer Economics: Empirical Analysis

D81 : Microeconomics→Information, Knowledge, and Uncertainty→Criteria for Decision-Making under Risk and Uncertainty

E21 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Consumption, Saving, Wealth

G51 : Financial Economics

H31 : Public Economics→Fiscal Policies and Behavior of Economic Agents→Household


Using new panel data from a representative survey of households in the six largest euro area economies, the paper estimates the impact of the Covid-19 crisis on consumption. The panel provides, each month, household-specific indicators of the concern about finances due to Covid-19 from the first peak of the pandemic until October 2020. The results show that this concern causes a significant reduction in non-durable consumption. The paper also explores the potential impact on consumption of government interventions and of another wave of Covid-19, using household-level consumption adjustments to scenarios that involve positive and negative income shocks. Fears of the financial consequences of the pandemic induce a significant reduction in the marginal propensity to consume, an effect consistent with models of precautionary saving and liquidity constraints. The results are robust to endogeneity concerns through use of panel fixed effects and partial identification methods, which account also for time-varying unobservable variables, and provide informative identification regions of the average treatment effect of the concern for Covid-19 under weak assumptions.

No. 2505
17 December 2020
Daily tracker of global economic activity: a close-up of the COVID-19 pandemic


JEL Classification

F44 : International Economics→Macroeconomic Aspects of International Trade and Finance→International Business Cycles

G17 : Financial Economics→General Financial Markets→Financial Forecasting and Simulation

Q02 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→General→Global Commodity Markets


This paper develops a novel indicator of global economic activity, the GEA Tracker, which is based on commodity prices selected recursively through a genetic algorithm. The GEA Tracker allows for daily real-time knowledge of international business conditions using a minimum amount of information. We find that the GEA Tracker outperforms its competitors in forecasting stock returns, especially in emerging markets, and in predicting standard indicators of international business conditions. We show that an investor would have inexorably profited from using the forecasts provided by the GEA Tracker to weight a portfolio. Finally, the GEA Tracker allows us to present the daily evolution of global economic activity during the COVID-19 pandemic.

16 December 2020
Fabio Panetta: Keeping cyber risk at bay: our individual and joint responsibility
Introductory remarks by Fabio Panetta, Member of the Executive Board of the ECB, at the fifth meeting of the Euro Cyber Resilience Board for pan-European Financial Infrastructures

View all publications on coronavirus

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