Europe's central bank launches new program to calm markets

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People wearing face masks travel by metro in Brussels, Wednesday, March 18, 2020. Belgium has ordered further lockdown measures starting Wednesday, following in the steps of European neighbours Italy, Spain and France. For most people, the new coronavirus causes only mild or moderate symptoms, such as fever and cough. For some, especially older adults and people with existing health problems, it can cause more severe illness, including pneumonia. (AP Photo/Francisco Seco)

FRANKFURT – The European Central Bank is launching a new, expanded program to buy financial assets in a bid to calm markets as monetary authorities struggle to counter the devastation the virus outbreak is wreaking on the global economy.

The ECB said it could buy up to 750 billion euros ($820 billion) in government and private sector bonds as well as commercial paper by year end.

The gravity of the situation was underlined by the fact that the bank had just announced new stimulus efforts only last week and had to revisit them with an unusual decision between scheduled meetings.

The announcement Wednesday follows follows unscheduled action by the Federal Reserve, as global central bankers try to keep financial market dysfunction from further disrupting the world's economy and cushion a steep downturn in activity.

The Fed on Sunday slashed its benchmark interest rate to near zero and said it would buy $700 billion in Treasury and mortgage bonds. On Tuesday, it put in motion two emergency lending programs, last used during the 2008 financial crisis, that aim to ease the flow of credit to U.S. businesses and households struggling amid the viral outbreak.

The Trump administration, separately, is backing a roughly $850 billion emergency stimulus package, which would include sending checks directly to American households to help tide them over during the disruption.

The ECB said its purchases, dubbed the Pandemic Emergency Purchase Programme, would be aimed at keeping borrowing costs down to support the outlook for Europe's economy and make sure the bank's low benchmark rates keep getting through to businesses and consumers.

The chief monetary authority for the euro currency union said that it is “committed to playing its role in supporting all citizens of the euro area through this extremely challenging time.”