The European Central Bank launched a €750 billion emergency bond purchase programme late on Wednesday in a huge effort to push down borrowing costs as the EU struggles with the economic consequences of the coronavirus.

The ECB said it launched “a new temporary asset purchase programme of private and public sector securities to counter the serious risks to the monetary policy transmission mechanism and the outlook for the euro area posed by the outbreak and escalating diffusion of the coronavirus, COVID-19.”

The ECB said it is fully prepared to increase the size of its asset purchase programmes and adjust their composition “by as much as necessary” and for as long as required.

It said it will explore all options and all contingencies to support the economy through the coronavirus shock. 

The central bank said: “This new Pandemic Emergency Purchase Programme (PEPP) will have an overall envelope of €750 billion. 

“Purchases will be conducted until the end of 2020 and will include all the asset categories eligible under the existing asset purchase programme …

“A waiver of the eligibility requirements for securities issued by the Greek government will be granted for purchases under PEPP. 

“The Governing Council will terminate net asset purchases under PEPP once it judges that the coronavirus Covid-19 crisis phase is over, but in any case not before the end of the year.”

The ECB said it will expand the range of eligible assets under the corporate sector purchase programme (CSPP) to non-financial commercial paper, “making all commercial papers of sufficient credit quality eligible for purchase under CSPP.”

The ECB added: “The Governing Council of the ECB is committed to playing its role in supporting all citizens of the euro area through this extremely challenging time.

“To that end, the ECB will ensure that all sectors of the economy can benefit from supportive financing conditions that enable them to absorb this shock.

“This applies equally to families, firms, banks and governments. 

“The Governing Council will do everything necessary within its mandate.

“The Governing Council is fully prepared to increase the size of its asset purchase programmes and adjust their composition, by as much as necessary and for as long as needed.

“It will explore all options and all contingencies to support the economy through this shock. 

“To the extent that some self-imposed limits might hamper action that the ECB is required to take in order to fulfil its mandate, the Governing Council will consider revising them to the extent necessary to make its action proportionate to the risks that we face.

“The ECB will not tolerate any risks to the smooth transmission of its monetary policy in all jurisdictions of the euro area.”