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Deutsche Bank Says ECB to Wind Down LTROs After Three-Year Loan - Bloomberg

The European Central Bank's second tranche of three-year loans next week may mark the end of its "generous" provision of long-term funding, according to Deutsche Bank AG. (DBK)

While markets are hoping for "a continuation of the program through the rest of the year," another large long-term refinancing operation, or LTRO, after this one "seems unlikely," London-based Deutsche Bank chief economist Thomas Mayer said in a note to clients today.

"We expect the more hawkish ECB council members, coming mainly from the AAA-rated countries, to oppose continuing generous LTROs on the grounds that these operations will reduce adjustment pressure on both governments and banks," Mayer wrote. "Unless the euro crisis deteriorates significantly further," Deutsche Bank expects the ECB "to wind down these operations" after the next three-year operation, he said.

by afew (afew(a in a circle)eurotrib_dot_com) on Wed Feb 22nd, 2012 at 02:44:57 PM EST
[ Parent ]
After loaning out a trillion at a 3-year term, why would there be any need for more?

2015 is going to be an interesting year, when the trillion needs to be paid back.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

by Migeru (migeru at eurotrib dot com) on Wed Feb 22nd, 2012 at 05:50:29 PM EST
[ Parent ]

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