Professional Documents
Culture Documents
Section 01
BY
ID 2017-1-10-103
Contents
Bank of England responded to the COVID 19 ......................................................... 3
Federal Reserve of USA responded to the COVID 19 .............................................. 5
European Central Bank responded to the COVID 19 .............................................. 7
People’s Bank of China’s responded to the COVID 19 ............................................ 9
Suggestions ...........................................................................................................10
Reference .............................................................................................................11
Bank of England responded to the COVID 19
On 19 March 2020, they have cut their interest rate to 0.1%. This was quite faster than any other
countries. Lower interest rates mean cheaper loans for businesses and households. Which will
reduce the costs faced by businesses and households in the UK. When conditions of the UK
government bond market deteriorated, in response the Bank of England Monetary Policy
Committee voted unanimously to extend the Asset Purchase Facility, through which the Bank of
England holds UK government and corporate bonds by £200 billion, taking it to a total of
£645bn. This was funded by printing money. Most of this extra money was used to buy UK
government’s bonds; the remainder was used to buy corporate bonds.
The Federal Reserve has cut rate so that banks pay to borrow from each other overnight, by a
total of 1.5 percentage points since March 3, 2020, bringing it down to a range of 0% to 0.25%,
rate were lowered by 150bp in March to 0-0.25bp. Purchase of Treasury and agency securities in
the amount as needed. Expanded overnight and term repos. Lowered cost of discount window
lending. Reduced existing cost of swap lines with major central banks and extended the maturity
of FX operations; broadened U.S. dollar swap lines to more central banks; offered temporary
repo facility for foreign and international monetary authorities.
The European Central Bank’s monetary policy measures took in response to the (COVID-19)
crisis, focusing on asset purchases and the targeted longer-term refinancing operations,
addressing on three key issues:
market stabilization,
providing central bank liquidity to maintain credit provision to the real economy, and
Ensuring that the overall monetary policy stance is sufficiently accommodative.
They have kept key interest rates at historically low levels so borrowing costs remain low, it will
impact how much it costs to take out a loan.
From The IMF And Other Sources, ECB decided to provide monetary policy support through,
Additional asset purchases of €120 billion until end-2020 under the existing program (APP),
and temporary additional auctions of the full-allotment, fixed rate temporary liquidity facility at
the deposit facility rate and more favorable terms on existing targeted longer-term refinancing
operations between June 2020 and June 2021, with interest rates that can go as low as 50 bp
below the average deposit facility rate.
The ECB also introduced a new liquidity facility (PELTRO), which consists of a series of non-
targeted Pandemic Emergency Longer-Term Refinancing Operations carried out with an interest
rate that is 25bp below the average MRO rate prevailing over the life of the operation. The
PELTROs commenced in May will mature in a staggered sequence between July and September
2021.The ECB also introduced an additional €750 billion asset purchase program of private and
public sector securities (under named Pandemic Emergency Purchase Program), initially through
end-2020. Till December 2020, the European Securities and Markets Authority set guidelines for
mitigating leverage risks of hedge funds. The agency published common criteria for assessing
leverage risk as well as the design, calibration and implementation of leverage limits.
People’s Bank of China’s responded to the COVID 19
The Chinese government’s distancing policies aimed at containing infections and saving lives
prevented firms from operating (triggering a supply-side recession) and consumers from
consuming (triggering a demand-side recession).
Liquidity injection into the banking system by open market operations. reduction of the 7-day
and 14-day reverse repo rates by 30 bps, as well as the 1-year medium-term lending facility
(MLF) rate and targeted MLF rate by 30 and 20 bps . Introduce a new instruments to support
lending to MSEs, including a zero-interest “funding-for-lending” scheme (RMB 400 billion) to
finance 40 percent of local banks’ new unsecured loans and incentivizing them to further extend
payment holidays for eligible loans by subsidizing 1 percent of loan principles (RMB 40 billion).
The bank has also taken multiple steps to limit tightening in financial conditions, including
measured forbearance to provide financial relief to affected households, corporate and regions
facing repayment difficulties. Key points,
delay of loan payments, with the deadline extended to the end of 2021 , and eased loan
size restrictions for online loans, and other credit support measures for eligible SMEs and
households,
tolerance for higher NPLs and reduced NPL provision coverage requirements,
support bond issuance by financial institutions to finance SME lending,
additional financing support for corporate via increased bond issuance by corporate,
including relaxing rules on insurers for bond investments,
increased fiscal support for credit guarantees,
flexibility in the implementation of the asset management reform and
Easing of housing policies by local governments.
Suggestions
Basically there is nothing that I can suggest as a student. These three countries and one full
organization is the key player of world economy. They have Central banks, and they will take
decisions based on political, geo-political, technological support, human resources And potential
medical support data. Especially in this corona situation. Based on those information they are on
the right track.
But I am shocked after seeing the china’s behavior. Are they savage? When UK, USA or EU
trying to cope up with corona situation. They are totally different, they are introducing money,
new ideas, new SUN, which means that either china knows how to cool down every situation nor
they had created this situation so that like Africa, they also wants to control the EU and Asia.
Most up to date news is china is increasing peoples to take 3 Childs instant of 2.
Reference
Every single information has been collected from the internet along with online newspaper and
news’s
https://www.bankofengland.co.uk/coronavirus
https://www.bankofengland.co.uk/monetary-policy-summary-and-minutes/2020/monetary-
policy-summary-for-the-special-monetary-policy-committee-meeting-on-19-march-2020
https://www.instituteforgovernment.org.uk/explainers/coronavirus-bank-england-first-lockdown
https://www.imf.org/en/Topics/imf-and-covid19/Policy-Responses-to-COVID-19#U
https://www.brookings.edu/research/fed-response-to-covid19/
https://www.imf.org/en/Topics/imf-and-covid19/Policy-Responses-to-COVID-19#U
https://www.ecb.europa.eu/home/search/coronavirus/html/index.en.html
https://www.bis.org › review PDF
https://ideas.repec.org/a/ecb/ecbbox/202000053.html
https://www.imf.org/en/Topics/imf-and-covid19/Policy-Responses-to-COVID-19#E
https://www.imf.org/en/Topics/imf-and-covid19/Policy-Responses-to-COVID-19#C
https://www.scmp.com/comment/opinion/article/3091970/why-peoples-bank-china-having-
good-coronavirus-pandemic
https://www2.deloitte.com/content/dam/Deloitte/cn/Images/inline_images/ind-fs/cn-fs-banking-
and-capital-markets-impact-covid-19-inline3.jpg