Posts tagged 'LTROs'

The ECB’s easing dilemma

Courtesy of Icap’s market analysis team, here’s the turnaround in the Eonia December 13-January 14 spread this month:

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LTRO payback, Eonia tightening edition

So, remember how the paying back of ECB LTRO loans was signalled as awfully good news for everyone?

Also, how it was seen as unlikely that Eonia would detach too much from policy rates or cause inadvertent Eurozone rate bifurcation as a result (which some in the market were sceptical of)? Read more

The credit matrix

Liquidity and credit are not always best friends — Funding for Lending in the UK and the LTROs spring to mind. However, blaming liquidity alone for the lack of credit out there is obviously [expletives removed].

For one, banks can’t lend if they can’t find borrowers — although it might be unfair to blame borrowers who are seeing unappealing terms — and for two, central banks have poured a fair amount of liquidity out there with more available on tap.

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Cyprus, where the vicious circle stopped

In continental Europe, we are witnessing the rather extreme outcome that results from having the provision of liquidity divorced from an ability to regulate banks…

UBS analysts John Paul Crutchley and Alastair Ryan, 2009

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