From: Richard Kahn To: "Jeffrey E" <[email protected]> Subject: Fwd: The ECB Loosened Policy Aggressively, Supporting our Eurozone Outlook and Portfolio Positioning Date: Thu, 10 Mar 2016 22:17:04 +0000 Richard Kahn IIBRK Associates Inc. 575 Lexington Avenue 4th Floor New York, NY 10022 Begin forwarded message: From: Judie Taylor < Subject: The ECB Loosened Policy Aggressively, Supporting our Eurozone Outlook and Portfolio Positioning Date: March 10, 2016 at 5:07:54 PM EST To: ' c ==' March 10, 2016 The ECB Loosened Policy Aggressively, Supporting our Eurozone Outlook and Portfolio Positioning The ECB loosened policy aggressively at the March 10th Governing Council Meeting. The ECB lowered policy rates, expanded asset purchases, provided additional liquidity for banks, and reinforced its forward guidance. These measures should lower the cost of funding for banks and corporates, and support a gradual economic recovery in the Eurozone, in line with our Outlook. • The ECB lowered its benchmark interest rates (main refinancing rate: -5bp to 0%; deposit facility rate: -10bp to -0.4%). • The ECB increased the pace and scope of its Asset Purchase Programme (APP). Planned monthly purchases increased from EUR 60bn to 80bn per month. Importantly, the ECB's purchases will now also include euro-denominated bonds issued by Eurozone non-financial companies. The ECB also raised the limits on intemational bonds it is prepared to hold in the APR • The ECB announced 4 new targeted long-term refinancing operations (TLTRO) for Eurozone banks. Banks will be able to borrow from the ECB for 4 years, at rates between the MRO and deposit rates (currently 0% and -0.4%). The rate will be lower the larger banks' new lending to households and companies. • Finally, the ECB reinforced its forward guidance. The Governing Council reaffirmed that it intends to keep rates "at current or lower levels" for an "extended period of time," specifying that this will go "we