ECB will do ‘everything’ to help economy: Lagarde

Bloomberg

The European Central Bank (ECB) will do its bit to help the region’s economy cope with its worst crisis in decades, but more international cooperation is needed to overcome the pandemic, according to President
Christine Lagarde.
“The Governing Council is committed to doing everything necessary within its mandate to help the euro area through this crisis,” Lagarde told the International Monetary and Financial Committee. “It is fully prepared to increase the size of its asset purchase program and adjust their composition, by as much as necessary and for as long as needed. It will explore all options and all contingencies to support the economy through this shock.”
The ECB has unleashed a barrage of support over the past weeks to support an economy in lockdown, including committing to spend more than 1 trillion euros ($1.1 trillion) on public and private debt this year. Banks get paid for borrowing money to lend to companies and households, and can pledge those loans as collateral in
exchange for yet more cash.
Lagarde said the ECB is also assessing the need for more steps to help lenders, including freeing up cash by further easing the buffers they are required to keep.
The International Monetary Fund — holding its spring meetings virtually for the first time — has warned of the worst global recession in almost a century and started to deploy unprecedented support. It has already granted billions of dollars of aid to the most vulnerable countries, approved debt service relief for 25 low-income states and established short-term liquidity lines to prevent a global shortage of dollars.
“The ECB supports the crisis-response measures by the IMF, notably the adjustments to its emergency lending toolkit and the creation of a short-term liquidity line for countries with strong macroeconomic fundamentals,” Lagarde said. “We are also open to exploring a possible new special drawing rights allocation for all IMF members.”
The ECB has already agreed to swap-line arrangements to provide euros to some European central banks outside the currency bloc, and Lagarde said further requests are being assessed.