FT News Briefing ECB to accept ‘fallen angel’ bonds as collateral, Covid-19 legal protections
Apr 23, 2020
The European Central Bank will now accept ‘fallen angel’ bonds as collateral, helping firms amidst the pandemic's financial fallout. Oil prices surged following heightened tensions in the Middle East. Meanwhile, U.S. business groups are advocating for legal protections against COVID-related lawsuits. In Russia, oligarchs are stepping in to support local economies, contrasting their actions with Western government responses. The financial pressures from the pandemic are mounting on Russia's revenues, revealing significant economic vulnerabilities.
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ECB Accepts Fallen Angel Bonds
- The ECB changed its rules to accept fallen angel bonds as collateral due to the economic crisis.
- This aims to maintain access to cheap loans for banks, crucial during the coronavirus crisis.
ECB Focus on Corporate Bonds
- The ECB's decision on fallen angel bonds primarily targets corporate bonds nearing junk status.
- This is because the ECB has already addressed Greek sovereign bonds, which are junk-rated.
Businesses Seek Legal Protection
- US businesses seek legal protection from COVID-19 related lawsuits as states reopen.
- They fear a surge in lawsuits if workers contract the virus after returning to work.