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11 Dec 2014
TLTRO disappoints – BBH
FXStreet (Barcelona) - The Brown Brothers Harriman Team note that today’s TLTRO disappointed as Banks borrowed only 130bln euros, less than half of what was available.
Key Quotes
“Banks borrowed about 130 bln euros from the ECB under the TLTRO facility. It was more than the first TLTRO, but less than half what was available. It underscores how far away the ECB is from achieving its intention of driving its balance sheet up by a trillion euros. This is thought to be achievable only in an asset purchase program that would include sovereign bond purchases, which is extremely controversial by raising political, legal and operational challenges. Note that about a week before the next ECB meeting, the European Court of Justice is to hand down a non-binding ruling on the legality of the OMT program.”
Key Quotes
“Banks borrowed about 130 bln euros from the ECB under the TLTRO facility. It was more than the first TLTRO, but less than half what was available. It underscores how far away the ECB is from achieving its intention of driving its balance sheet up by a trillion euros. This is thought to be achievable only in an asset purchase program that would include sovereign bond purchases, which is extremely controversial by raising political, legal and operational challenges. Note that about a week before the next ECB meeting, the European Court of Justice is to hand down a non-binding ruling on the legality of the OMT program.”