Key facts
- More than 30 central banks have expressed interest in the ECB's expanded euro liquidity facilities.
- The ECB's EUREP facility allows foreign central banks to obtain euros against collateral denominated in the single currency.
European Central Bank chief economist Philip Lane said on Wednesday that providing euro liquidity safety nets to foreign countries can strengthen the euro's global role and amplify the reach of its monetary policy. Speaking at a closed-door event in Shanghai, Lane said demand for the ECB's recently expanded euro liquidity facilities had been strong, with more than 30 central banks expressing interest. He stated that liquidity lines bolster confidence in the currency and reduce associated risks, supporting its wider usage. Lane argued that greater international use of the euro would enhance the ECB's ability to deliver on its inflation mandate by extending the global impact of euro area monetary policy. He added that the ECB's EUREP facility could boost bond markets in the 21-country bloc, particularly through increased purchases by official reserve managers. ECB President Christine Lagarde recently said the bank was also reviewing its network of currency swap lines, which allow major central banks to exchange their own currencies for euros. Lane said such arrangements should be reserved for central banks in economies with close financial links to the euro area and a clear capacity to repay euro liabilities.