The European Central Bank has widened access to its euro liquidity facility for foreign central banks, aiming to boost the euro’s global role and shield the bloc from external financial shocks
The European Central Bank has thrown open its euro liquidity backstop to nearly all foreign central banks, in a calculated bid to strengthen the single currency’s global standing at a time of geopolitical flux and shifting financial alliances.
In a statement on Saturday, the Frankfurt-based central bank said it would enhance its Eurosystem repo facility for central banks (EUREP), granting standing access “in principle” to all central banks outside the euro area, unless excluded on grounds such as international sanctions, money laundering or terrorist financing.
The revamped framework, which will take effect in the third quarter of 2026, marks a significant broadening of a facility that was initially introduced during the pandemic in 2020 and so far limited to a small group of neighbouring countries.
The move is widely seen as part of ECB President Christine Lagarde’s broader strategy to capitalise on what she has described as the euro’s “global moment”, as unpredictable US economic policy and rising geopolitical fragmentation prompt fresh debate over the long-standing dominance of the US dollar.
What is EUREP?
EUREP—the Eurosystem repo facility for central banks—allows non-euro area central banks to borrow euros from the ECB against high-quality euro-denominated collateral, such as bonds issued by euro area governments with strong credit ratings.
Technically structured as a repurchase agreement, the facility provides backstop euro liquidity in times of market stress. By enabling central banks to access euros quickly, it strengthens their capacity to manage foreign exchange liquidity crunches and stabilise domestic banking systems.
“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 ECB said in its press release.
Broader, more flexible access
Under the enhanced framework, foreign central banks will be able to request standing access through a formal application by their governors addressed to the ECB president. Each participating central bank will be able to borrow up to €50 billion against eligible collateral—a substantial increase over previous limits.
The ECB said the updated facility is designed to be “more effective and flexible” in supporting the smooth transmission of euro area monetary policy.
“The updated framework introduces standing access, in principle, for all central banks,” the ECB noted, adding that the changes are intended to make the facility “more flexible, broader in terms of its geographical reach and more relevant for global holders of euro securities.”
Until now, EUREP access had been confined to eight countries neighbouring the European Union. As an emergency instrument, usage has been modest, with repo lines typically drawn only during periods of acute stress.
How it will work—and what we won’t know
The repurchase agreements under EUREP will be extended by some of the 21 national central banks of the Eurosystem, although the ECB has not specified which institutions will operationally execute the lines.
There are no explicit restrictions on how foreign central banks can deploy the borrowed euros. Previously, usage was largely reserved for onward lending to domestic banks facing funding stress.
Notably, the ECB will also scale back transparency around individual usage. It will discontinue publishing country-specific data on repo drawings and instead disclose only aggregate weekly figures on overall euro liquidity provided across all repo lines.
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