Catenaa, Monday, February 16, 2026- The European Central Bank on Saturday announced it would make its euro liquidity backstop globally available and permanent starting in the third quarter of 2026, seeking to strengthen the euro’s international role amid rising market volatility.
Speaking at the Munich Security Conference, ECB President Christine Lagarde said the bank must be prepared for a more unstable environment and guard against forced sales of euro-denominated assets during market stress.
The revamped facility will allow central banks worldwide to access euro funding through repo lines, provided they are not excluded for reputational reasons such as money laundering, terrorist financing or sanctions violations. The ECB said the standing arrangement will grant access of up to 50 billion euros, replacing temporary lines that previously required periodic extensions.
Repo lines enable central banks to borrow euros against high-quality collateral when private funding markets tighten. The move mirrors similar tools maintained by the Federal Reserve, including its FIMA Repo Facility designed to stabilize U.S. Treasury markets during periods of stress.
Lagarde said guaranteed access to euro liquidity would support confidence to invest, borrow and trade in euros. The ECB added that broader and more flexible access could encourage global institutions to hold more euro-denominated assets.
The announcement comes as investors reassess the dollar’s outlook amid policy uncertainty under resident Donald Trump. Lagarde has argued that expanding financial infrastructure is necessary if the euro is to capture a larger share of global markets.
The new facility is expected to enhance demand for euro assets and deepen the currency’s global standing.
