ECB unveils new monetary policy framework
Move will see central bank make cheaper loans to eurozone lenders as it shrinks its balance sheet
The European Central Bank’s (ECB) governing council announced changes to its monetary policy operating framework today (March 13), concluding the review it started in December.
The ECB will reduce the cost of its lending to commercial banks to support them while it reduces the size of its balance sheet. It will continue to use the deposit facility rate as its main policy tool, but reduce the spread between that and the main refinancing operations rate.
The spread is currently 50 basis points
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