The ECB's EUREP lends euros to foreign central banks at backstop prices

During the 2020-2022 period of global funding stress, central banks outside the euro area that needed euros had limited options: swap lines covered only a few major central banks, so smaller authorities had to sell euro assets or scramble for private funding exactly when markets froze.

The ECB answered with EUREP, a repo facility open to non-euro area central banks and monetary authorities. A foreign central bank can borrow euros against high-quality euro-denominated securities it holds, with no ex ante restrictions on how the funds are used in its jurisdiction.

The design detail is the backstop pricing: EUREP loans cost the MRO rate plus a spread set by the Governing Council, so using the facility is deliberately unattractive in calm times. The window exists to be known, not used — its presence reassures markets that euro liquidity will not vanish for foreign central banks in a crisis.