ECB held unscheduled meeting to discuss coronavirus, sources say

FRANKFURT (Reuters) – The European Central Bank’s rate-setting Governing Council held a telephone conference call late on Tuesday to assess the impact of the coronavirus outbreak but policy action was not on the agenda, two sources told Reuters.

The meeting, held after the Federal Reserve’s rate cut, discussed operational and business continuity issues and there was no debate on whether the ECB should enact policy measures, like its U.S. counterpart, the sources said.

An ECB spokesman declined to comment. The bank’s next scheduled meeting is on March 12.

The sources said the discussion centered on how the financial system was coping with the outbreak and how the euro zone’s 19 central banks would cooperate in case of stress.

Although there are no signs of liquidity problems or increased use of cash, policymakers discussed how the ECB and the national central bank would identify and respond to such signs of stress, the sources added.

ECB President Christine Lagarde said on Monday that the bank would be ready to take “targeted” measures if needed. Sources close to the discussion said that the main focus of such measures would be providing financing and liquidity to small and medium-sized enterprises.

Markets now almost fully price in a 10 basis point cut in the ECB’s minus 0.5% deposit rate next Thursday.

Separately, the ECB called off public forums that were to form a key part of its one-year policy review because of concerns about the coronavirus outbreak, it said in a statement on Wednesday.

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