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ECB says national c.banks have flexibility on QE bond lending
[LONDON] The European Central Bank said on Thursday that the eurozone's national central banks have some flexibility on how they lend out government bonds bought under its one trillion euro quantitative easing plan.
The ECB introduced a 'securities lending' framework on Thursday on how it will loan bonds back to banks to avoid its QE programme causing distortions or shortages in repo markets.
It included a fixed borrowing term of one week with the option to roll over the loan three times and imposed limits on the amount of any single bond that can be borrowed by a counterparty.
A spokesman for the ECB said, however, that national central banks, which include the Bundesbank in Germany, Banque de France or Banca d'Italia, had "some flexibility" to adapt the framework to suit their own needs.