The ECB easing fails to fly
MADRID | By JP Marín Arrese | Just cast a look at the dismal performance of the medium-term targets of LTRO liquidity tenders, that amount to barely a fifth of the amount pumped in three years ago.
LTRO
Will ECB credit boost work?
MADRID | By J.P. Marín Arrese | Mario Draghi unveiled the requirements to be met for drawing cheap money from the targeted long-term facility on Thursday. Those look extremely loose and scarcely demanding. Banks may cash up to 7% of their net lending to businesses and households in the auctions scheduled later on this year. A move that could lead to a massive €400 billion funding injection, should bidders make full use of their potential rights. Borrowing four-year tranches at interest rates so low as 0.25%, seems indeed an unbeatable incentive.
Draghi is in trouble: credit still doesn’t flow in the periphery
MADRID | By Francisco López | The ECB President announced with fanfare last month a battery of measures to revive the credit in the EZ. The problem is that the open bar announced by Draghi won’t have an impact on loans until 2015 and, meanwhile, credit fall continues to accelerate in some peripheral countries, especially in Spain and Italy. There are those who believe that the latest data could force Mr Draghi to approve a direct debt purchase program before year’s end.
The TLTRO clashes with the old LTRO
MADRID | The Corner | The liquidity net increase of the new measures by the ECB may be substantially less than expected, because of two main reasons: as a consequence of the 3-year LTRO maturity next December and February, and due to the improvement in the workings of the money markets.
EU banks still owe €450bn from last LTRO
MADRID | The Corner Team | Eurozone’s banks have yet to pay back €450 billion from the 2012 long-term refinancing operation or LTRO. Executive Director in Global Cash Equity Sales at JP Morgan Hugo Anaya maintains a positive outlook and believes that even the P/E re-rating in the Euro stock exchange may continue.
Draghi, Open to More Long-Term Loans
The Corner Team | ECB’s President Mario Draghi opened the door to providing more money to eurozone banks in order to keep market interest rates low and ensure the recovery, which finally seems to be picking up. His comments have been like fresh air to Europe’s banks, which face another stress test in the coming months.
Monday’s chart: it’s the lending, Eurocrats!
how can i get my ex girlfriend back LONDON | Will the trick of cutting the European Central Bank's deposit rate pay off? Everyone had noticed the extremely high levels of cash European banks left with the central entity for a mild profit in exchange of, well, nothing from their part. Particularly after the ECB made liquidity available, via its long-term refinancing operations, it was clear that the European banks…
Thursday’s chart: LTROs vs real economy
how do you get your best friend to break up with your ex LONDON | Now that the European banks have again been placed in the eye of the storm, even though admittedly some more than others, a chart from BNP Paribas analysts shows why. Banks still pose a barrier at the core of most efforts towards recovery. Take the long-term refinancing operations or LTROs from the European Central Bank: they are meant to…
Newton GDB Fund: “austerity is not for weak economies”
LONDON | In a report to investors in London, Newton Global Dynamic Bond Fund, which is part of Bank of New York Mellon, noted that political decisions taken by the European Comission regarding the euro crisis are a source of worry for the markets. In fact, plans to tackle weak economies in the periphery may be raising the chances of default. Newton GDB Fund said that its portfolios have increased…
“The ECB liquidity has been more stabilising than the bailout funds”
By Tania Suárez, in Madrid | Alberto Matellán, director of Strategy and Macroeconomics at Inverseguros SVB, considers that the effect of the ECB liquidity auctions will fade away and that, in the end, fundamentals will have a bigger influence. In order to stabilise the euro zone situation, is it a reasonable option the simultaneous use of the rescue funds? The bailout funds are a mechanism for ‘buying time’; so, from that viewpoint,…