Now that the Fed has opened the pandora’s box of moral hazard by purchasing select junk bonds, every other central bank would like a piece of the action. And sure enough, as Bloomberg reports, on Wednesday evening the ECB will hold a call where they may discuss whether to accept junk-rated debt as collateral from lenders.

Translation: the ECB is about to announce it will accept junk bonds as eligible collateral, and why not: the Fed is doing so, so it makes sense for everyone else to pile on.

According to Bloomberg, in a step similar to the Fed’s backstopping of fallen angel high yield paper, the ECB’s conference could be “intended to head off concerns that some sovereign and corporate bonds will soon be downgraded to non-investment grade because of the cost of fighting the coronavirus pandemic.”

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