The European Central Bank has unprecedentedly eased the terms of guarantee to support lending during the Corona pandemic crisis.


According to ArabiaNet, the package of measures aims to reduce the difficulty of financial conditions throughout the euro area and includes the use of loans from small companies as collateral in addition to the Greek sovereign debt with poor credit rating.


The announcement of the Governing Council of the European Central Bank is the last step in a series of major steps taken by the bank to maintain the continued flow of funds through the financial system at a time when the Covid epidemic is a 19-blow to the global economy, according to Agence France-Presse.


The bank’s Governing Council described the recent measures as unprecedented and temporary during the global epidemic crisis.


One of the most prominent decisions is the bank’s announcement that it will exceptionally accept Greek bonds as security, for the first time in two years.


Greek banks usually face difficulties raising funds in the financial markets due to the very poor and the lowest rating on government debt burdened by debt which means that investors may lose their money.


The announcement came after the Frankfurt-based European Central Bank reported last month that Greek bonds would be included for the first time in a series of asset purchases designed to maintain credit flows in the 19-nation euro zone.


Under the reduced rules, the European Central Bank may accept loans from small entities as collateral.


He stated that he would accept loans with lower credit quality and loans in foreign currencies.


In particular, he stressed that he would accept guarantees in the form of secured loans with government support for small and medium-sized companies, self-employed people and families, after countries like Germany offered to provide guarantees to cover this type of loan to prevent the collapse of companies during the crisis.


The Governing Council also agreed to raise the level of risk tolerance by agreeing to reduce the amount of collateral needed by refinancing, making it easier for banks to borrow at the very low interest rates set by the European Central Bank.


In recent weeks, the European Central Bank has taken steps similar to those taken by other central banks to provide financial support as the world prepares for the largest financial crisis since the 2008-2009 crisis.