The European Central Bank (ECB) is increasing access to euro liquidity for central banks worldwide, a move intended to bolster the single currency’s global role amid a complex geopolitical landscape and strengthen its position against competing currencies, notably the U.S. Dollar.
On Saturday, February 14, 2026, the ECB’s Governing Council decided to enhance the Eurep system (Eurosystem repo facility for central banks), the mechanism for providing funds to countries outside the Eurozone. According to the ECB, the goal is to
make it more flexible and effective in supporting the orderly transmission of monetary policy in the euro area.
What is Eurep?
Eurep is a standing facility created by the European Central Bank to supply euros to central banks in countries that do not utilize the currency. Its primary objective is to support the smooth functioning of monetary policy within the Eurozone and prevent global liquidity strains.
Through this mechanism, central banks outside the European Union can borrow euros by offering high-quality collateral, such as government bonds issued by Eurozone countries or supranational institutions, up to a maximum of 50 billion euros.
The tool is particularly valuable during periods of financial instability, preventing central banks from being forced to sell European government bonds to meet unexpected liquidity needs. This instrument is now set to be expanded.
Lagarde’s Decision
Speaking at the Munich Security Conference, ECB President Christine Lagarde stated:
The ECB must be prepared to address a more volatile environment. We need to avoid a stress situation triggering massive sales of euro-denominated securities in global financial markets, which could hinder the transmission of our monetary policy. This means we must assure partners wishing to transact in euros that euro liquidity will be available if needed.
Lagarde also indicated that the enhanced tool strengthens the euro’s role, potentially at the expense of the dollar. The availability of a lender of last resort for central banks worldwide increases confidence in investments, lending, and trade denominated in euros.
This assurance of access to cash, even during market turbulence, provides an additional incentive for global central banks to hold reserves in the European currency.
The Changes
The ECB’s decision isn’t intended as a form of “currency charity,” but rather to protect the Eurozone’s debt market by making the Eurep mechanism more accessible.
These modifications broaden the scope of Eurep from a regional to a global dimension. The aim is to prevent central banks outside Europe from being compelled to sell large volumes of government bonds in the market, which could lead to price declines and rising yields.
Central banks from countries not part of the European Economic and Monetary Union (EMU) will be able to borrow euros by offering government debt as collateral. This structure is designed to prevent the sale of government bonds during turbulent times to obtain euros.
