The ECB expands its emergency lending program in euros (EUREP) to almost all central banks worldwide, aiming to enhance the role of the euro in the international financial system.

The decision announced on 14/02/2026 helps many central banks access euro resources more quickly when markets fluctuate, while also creating a safety net similar to the liquidity support mechanisms in the U.S., thereby bolstering confidence in euro-denominated assets.

MAIN CONTENT

  • EUREP opens from the regional program to almost all central banks around the world.

  • Each approved bank can borrow up to 50 billion euros, secured by high-quality euro area government bonds.

  • The ECB expects this 'lender of last resort' mechanism to increase confidence in holding euro assets during periods of geopolitical instability.

EUREP is open to almost all central banks around the world.

The ECB allows most global central banks to apply to participate in EUREP, rather than limiting it to a few neighboring European countries as before.

Before this change, the program only applied to 8 countries close to Europe, including Romania, Hungary, Albania, and Montenegro. Under the new adjustments, almost all eligible central banks can apply.

Excluded cases include organizations related to money laundering, terrorism financing, or those under international sanctions. The application process is conducted through a formal request letter from the central bank governor sent directly to the ECB president.

Limits and collateral of EUREP loans

Each approved central bank can borrow up to 50 billion euros, with the condition of being secured by high-quality euro area government bonds.

The ECB specifies that loans must be secured by 'good quality' euro-denominated bonds issued by European governments. This structure aims to reduce credit risk while maintaining collateral asset standards consistent with financial stability objectives during periods of market volatility.

Implementation timing and extent of full access

The new rules will start from July 2026, and central banks will have full access in Q3 2026.

The ECB states that the scope of access and scale of resources under the new framework is greater than before. The implementation by the milestone of July 2026 and completion of 'full access' in Q3 2026 gives central banks time to prepare documentation, collateral, and internal operational processes.

The ECB allows more flexible use of borrowed euros and reduces detailed reporting.

The ECB removed the requirement to lend back domestically and shifted to publishing borrowing data in aggregated weekly formats instead of by country.

Previously, a regulation required central banks to use borrowed euros to lend back to domestic banks. This regulation has been removed, allowing borrowers to use euros according to their liquidity management and market stability needs.

The ECB will also stop sharing detailed country-specific data and will only publish aggregated figures weekly. This approach aims to enhance privacy during market stress, when information about liquidity demands may cause undesirable psychological effects.

The ECB sees geopolitical risk as the main driver of change.

ECB President Christine Lagarde believes that political instability, supply chain disruptions, and fierce business competition necessitate a quick, easy-to-use, and long-term mechanism for accessing euros.

On the same day as the Munich Security Conference, Christine Lagarde presented adjustments and described the new program as faster, easier to use, and more permanent. The central argument is that when financial stress occurs, timely access to euros will strengthen public confidence in the euro.

The ECB states that this approach is similar to the FIMA program of the U.S. Federal Reserve, which allows foreign entities to access USD when secured by U.S. Treasury bonds, aimed at supporting market stability. The ECB's goal is to create a similar safety net for the euro.

The liquidity safety net can help increase the demand for holding euro assets over time.

If investors and central banks believe that euros can be supplied quickly during a crisis, they may be more willing to hold and use euro assets.

The ECB highlights the context that the euro still lags far behind the USD in global foreign exchange reserves: euro about 20% while USD about 60%. Nevertheless, having a euro 'backup' for central banks may gradually affect reserve holding trends and asset allocation.

When institutions believe they can access euros quickly if needed, the incentive to hold euro-denominated assets may increase. This can spill over into trade, lending, and investment using euros, especially during periods of market volatility and sudden increases in liquidity demand.

Such emergency programs are often little used in normal times, but the 'signal effect' is significant. When market stress occurs, the available mechanism can help mitigate psychological spirals and reduce the risk of liquidity breaks.

"This mechanism also reinforces the role of the euro. Having a 'lender of last resort' for central banks worldwide increases confidence to invest, borrow, and transact in euros, knowing that access will still be available during periods of market disruption. In a world where supply chain dependency has become a security weakness, Europe must be a stable source – for ourselves and for our partners."
– Christine Lagarde, President of the ECB, speaking at the Munich Security Conference (2026)

Frequently Asked Questions

What is EUREP and what is it used for?

EUREP is the ECB's emergency lending program that provides liquidity in euros to central banks when financial markets are volatile, aimed at supporting system stability and reinforcing confidence in the euro.

How much can central banks borrow under EUREP?

Each approved central bank can borrow up to 50 billion euros, with a collateral requirement of high-quality euro area government bonds.

When will the new EUREP regulations take effect?

The new rules will start from July 2026, and full access will be implemented in Q3 2026.

Does the ECB still publish borrowing data by country?

No. The ECB will stop sharing details by country and will only publish aggregated figures weekly to enhance privacy in operations.