ECB Plans to Block Banks from Giant Windfall as Rates Rise: FT

The European Central Bank is exploring ways to prevent banks from earning windfall profits from the subsidized lending program it launched during the pandemic, once it raises interest rates later this month, according to a report Sunday by the Financial Times.

The ECB provided €2.2 trillion of subsidized loans to banks during the Covid-19 crisis to avoid a credit crunch. With rates set to hike, that will provide extra profits worth up to €24 billion for euro area lenders, the FT said, citing analysts.