The ECB, the lockdown and the monetary financing lock

Eurozone’s central bank may need to break its prohibition on monetary financing to fight pandemic

In March 2020, the world’s major central banks found themselves confronting the most rapid and severe downturn since the Great Depression. Most eurozone governments responded to the novel coronavirus pandemic by imposing lockdowns and putting much economic activity on hold in the hope that this would prevent, or at least slow the spread of, Covid-19 – something that could have led to massive panic in the eurozone’s financial markets, or even a run of failures in its banking system.

The crisis

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