In its announcement, the ECB said it will accept government-guaranteed loans as collateral even with lower credit quality, and it will allow banks to pledge more unsecured debt as collateral. It will also reduce collateral valuation haircuts by a fixed factor of 20 pct and will start accepting Greek government debt as collateral, even if such papers are below investment grade.
The ECB also said it will make it easier for banks to borrow cash at rock bottom rates during the coronavirus crisis, as it eased collateral requirements even at the cost of taking on greater risk.
The measure will stay in place during the current pandemic and will be reviewed before the end of the year, the ECB said.
