The European Central Bank said it would embark on an enormous wave of bond purchases intended to counter the “serious risks” to the eurozone caused by the coronavirus pandemic.
The bank will buy up to 750 billion euros, or $820 billion, in government and corporate bonds and other assets, pumping cash into financial markets deeply rattled by the pandemic.
The announcement came after an unusual late-night conference call among members of the bank’s Governing Council, which followed signs that bond investors were losing faith in Italy’s ability to repay its enormous government debt. If Italy’s borrowing costs reach unsustainable levels, the future of the eurozone would be at stake.
The bank said it would buy even more assets if need be.
“The Governing Council is fully prepared to increase the size of its asset purchase programs and adjust their composition, by as much as necessary and for as long as needed,” the bank said in a statement. “It will explore all options and all contingencies to support the economy through this shock.