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BoJ and ECB follow the FED: ECB Freed Up $112 Billion at Banks

The European Central Bank freed up about 100 billion euros ($112 billion) of bank capital to maintain the flow of credit amid the spread of the coronavirus, according to a top regulator.

The money will be available for lending after the ECB decided to allow banks to operate with lower capital buffer and use subordinated debt to help meet their individual requirements, European Banking Authority Chairman Jose Manuel Campa said on Bloomberg TV.

“Banks are well capitalized and they’re operationally ready to confront the situation,” Campa said in an interview with Anna Edwards and Matt Miller on Monday.

The Bank of Japan responded to the Federal Reserve’s rate cut with measures to pump money into the Tokyo stock market and the economy after they were battered by the coronavirus pandemic.

The Japanese central bank said it would double purchases of exchange-traded funds on the stock market, which has fallen more than 25% from its recent peak. Until now, it has targeted annual purchases of ¥6 trillion ($56 billion). On Monday it said it would double that to ¥12 trillion annually.

The bank raised its target for its holdings of corporate bonds to ¥4.2 trillion from ¥3.2 trillion previously and for commercial paper to ¥3.2 trillion yen from ¥2.2 trillion yen previously.



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