The European Central Bank offered lenders a fourth round of regulatory relief to help massive stimulus efforts feed through to a virus-stricken economy.
Banks will be temporarily allowed to tweak the math behind a financial strength metric known as the leverage ratio to their benefit by stripping out deposits held at central banks, the ECB said in a statement on Thursday. With a looser leverage ratio for the next nine months, banks will be able to make more loans with less capital.
The coronavirus plunged an already sluggish eurozone economy into its deepest recession in living memory. The ECB responded by ramping up bond purchases to keep borrowing costs low, while aiming to ensure banks are able to pass on cheap credit to companies and individuals.
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