If they were putting into the economy they'd do it some way where it didn't just end up in offshore tax free accounts, wouldn't they ? they'd embark on a capital spending programme involving improving housing and stuff. keep to the Fen Causeway
You will not be surprised to hear that this was the largest one-day ECB/Eurosystem operation ever. Even more remarkable than its scale are the terms on which the one-year funds were made available. There can be no doubt that this operation represents both a subsidy and a gift from the Eurosystem to the banks that participated in the operation. I hope to clarify the distinction between a subsidy and a gift in what follows.
It is possible for the ECB/Eurosystem to provide Euro Area banks with funds at a rate well below the rate at which the banks could have funded themselves elsewhere, without this implying a subsidy from the ECB/Eurosystem to the banks.
There is a subsidy only if the rate charged by the ECB to the banks is less than the ECB's risk-adjusted opportunity cost of funds.
