# ECB Euro Backstop Draws Interest From More Than 30 Central Banks

By Riza Dagoc

Canonical URL: https://www.tokenpost.com/news/regulation/36974
Published: 2026-10-21T19:42:13.000Z
Updated: 2026-10-21T19:42:13.000Z
Section: Regulation

> The first foreign central banks completed onboarding in early October and can begin drawing on lines of up to €50 billion each in the fourth quarter of 2026.

More than 30 central banks have expressed interest in the European Central Bank’s expanded euro liquidity backstop, which aims to keep funding strains abroad from disrupting euro-area markets and monetary policy.

The interest emerged over the past six months. The Eurosystem completed onboarding for its first foreign central banks in early October. Those institutions can begin drawing on the facility during the fourth quarter of 2026. Each participating central bank’s line is capped at €50 billion.

The Eurosystem repo facility for central banks (EUREP) provides euros to central banks outside the euro area. Borrowers must pledge high-quality assets denominated in euros. Loans mature in one day to one week, with extensions allowed. The facility offers temporary euro funding to eligible central banks that hold the required collateral.

Borrowing costs are tied to the ECB’s main refinancing operations rate, plus a spread set by its Governing Council. The €50 billion limit applies to each line. Access to the facility therefore depends on both an approved line and collateral that meets EUREP’s requirements.

ECB Executive Board member Philip R Lane discussed the backstop at a CF40-Euro50 luncheon in Shanghai on Oct. 21. He described liquidity lines as a way to contain overseas funding pressure before it reaches euro-area markets and interferes with the transmission of monetary policy.

The collateral requirement may also affect demand for euro-denominated debt. Foreign central banks using EUREP need eligible euro assets, which could encourage them to hold euro bonds, including longer-term securities. Lane identified that potential demand as a source of support for euro bond markets.

Swap lines operate differently. They can provide euros against a foreign central bank’s local currency rather than euro-denominated collateral. Lane described them as riskier and said they should be limited to central banks able to repay their euro debt and backed by a highly rated sovereign.

The ECB announced the EUREP expansion in February, with changes taking effect in the third quarter of 2026, and left its swap lines unchanged. The first foreign central banks onboarded in October can begin drawing on their EUREP lines during the fourth quarter of 2026.