The European Central Bank (ECB) said Tuesday that it has decided to adopt an "unprecedented" set of temporary collateral easing measures to mitigate the tightening financial conditions across the euro area due to the coronavirus outbreak.
It is the ECB's latest response to the coronavirus economic shock, in addition to other measures it announced over the past weeks, including additional longer-term refinancing operations and the 750-billion-euro (815 billion U.S. dollars) Pandemic Emergency Purchase Program.
The measures announced Tuesday collectively support the provision of bank lending, especially by easing the conditions at which credit claims are accepted as collateral, the ECB said.
The measures also include waiving the minimum credit quality requirement for Greek sovereign debt instruments so that they could be accepted as collateral in credit operations.
The central bank said it will temporarily increase its risk tolerance level in credit operations through a general reduction of collateral valuation haircuts by 20 percent.
The ECB said the duration of the measures will be re-assessed before the end of 2020, to see whether there is a need to extend some of these measures to ensure the effect of its liquidity providing operations.