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The European Central Bank on Thursday gave euro zone banks relief worth €73-billion ($113.8-billion) from a key capital requirement in order to help them keep credit flowing amid the coronavirus pandemic.

The 115 banks directly supervised by the ECB will be allowed to exclude some of their exposure to the central banks, including deposits, from the calculation of their leverage ratio until next June.

The ECB said this exclusion would raise the aggregate leverage ratio of 5.36 per cent by about 0.3 percentage points, equal to about €73-billion based on the latest available data as of the end of March.

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“The situation brought about by the coronavirus pandemic has affected all euro area economies in an unprecedented and profound way,” the ECB said.

“This situation has resulted in an ongoing need for a high degree of monetary policy accommodation, which in turn requires the undeterred functioning of the bank-based transmission channel of monetary policy.”

The leverage ratio, which requires banks to hold capital worth 3 per cent of their total exposure, will only become binding in July but banks are already required to disclose it.

The ECB’s banking supervision arm will have to take a new decision if it wishes to extend the relief beyond the end of June, 2021, when the leverage ratio becomes binding.

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