ECB's Lane: EUREP drawdowns start Q4 2026, €50 billion cap per central bank

• Onboarded central banks will be able to draw from the enhanced EUREP facility as of the fourth quarter of 2026, Lane says
• Maximum line size per individual central bank is €50 billion
• EUREP loans are priced at the main refinancing operations rate plus a spread set by the Governing Council
• Single-transaction maturity ranges from one day to one week and may be extended
• More than thirty central banks have expressed interest in EUREP in the past six months, Lane says
• Onboarding of first foreign central banks to the enhanced facility was completed at the beginning of October

Onboarded central banks will be able to draw from the enhanced Eurosystem repo facility for central banks (EUREP) as of the fourth quarter of 2026, ECB Executive Board member Philip R. Lane said in remarks prepared for a CF40-Euro50 luncheon in Shanghai on 21 October 2026.

ECB's Lane: EUREP drawdowns start Q4 2026, €50 billion cap per central bank

The maximum line size per individual central bank is €50 billion, Lane said. Single transactions will have a maturity of one day to one week and may be extended.

Pricing and access

EUREP provides backstop euro liquidity to non-euro area central banks against high-quality euro-denominated collateral, with appropriate risk mitigants. Loans are priced at the main refinancing operations (MRO) rate plus a spread set by the Governing Council to preserve the backstop character of the facility.

The updated framework introduces standing access, in principle, for all central banks, unless excluded on grounds including money laundering, terrorist financing or international sanctions. Onboarded central banks can use EUREP funds flexibly, without ex ante restrictions.

More than thirty central banks have expressed interest in EUREP in the past six months, according to Lane. The onboarding of the first foreign central banks to the enhanced facility was completed at the beginning of October.

Expected market impact

Lane said EUREP can be expected to exert a strong positive impact on the euro-denominated bond market, boosting the savings and investments union initiative. He said the facility encourages holdings of euro-denominated debt securities by foreign central banks and of longer-duration bonds by enhancing their liquidity.

Lane said EUREP offers same-day liquidity of up to €50 billion off-market in a single transaction, and that reserve managers would be able to hold bonds from all euro area countries rather than just the most liquid bonds. He said this contributes to better integration of the euro area bond market and extends to Eurosystem-recognised supranational bonds such as European Commission bonds.

Swap lines as complement

Lane said swap lines complement EUREP from a monetary policy perspective. Swaps can be deployed against local-currency collateral and are not contingent on holding euro-denominated collateral, which he said gives them stronger signalling effects in terms of access to liquidity.

He said swap lines work more directly through the bank credit channel, while EUREP is mainly focused on supporting the functioning of euro-denominated debt securities markets at the global level.

Since swap lines entail greater risks than EUREP, Lane said it is appropriate to provide them only to foreign central banks clearly capable of repaying their euro debt in due course, requiring the backing of a highly-rated sovereign. He said careful calibration and assessment are needed to mitigate potential overreliance and moral hazard.

Context

Lane said the world economy has undergone profound structural shifts related to geopolitics and changes in the international financial system, and that the macroeconomic and financial environment will remain uncertain and potentially more volatile.

He said empirical evidence suggests the ECB's liquidity lines have been effective in reducing financial pressures on euro funding markets.

The ECB decided this year to enhance EUREP to make it more flexible and effective in supporting the smooth transmission of euro area monetary policy, Lane said.

Lane said the views expressed are his own and should not be interpreted as representing the collective view of the ECB Governing Council.