The European Central Bank (ECB) announced Wednesday that it will lend banks as much money as they need for three years, in addition to loosening collateral rules and lowering banks’ reserve ratio requirements (RRR).
The announcement from ECB President Mario Draghi came as the bank also dropped its key interest rate to 1%.Bloomberg reported that the rate cut, at a quarter percent, was the second in two months, and matched a record low.
ECB officials may also loosen collateral criteria so that banks can gain easier access to cheap cash, and lengthen the terms of loans, according to three unnamed euro-area officials who were familiar with the discussions.