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A critique of the ECB's liquidity policies | 66 comments (66 topical, editorial, 0 hidden)
Re: A critique of the ECB's liquidity policies (4.00 / 2)
The second failure was discounted for being at the end of the year: ECB Drains Less Cash Than Planned as Banks Stay Liquid Before End of Year - Bloomberg (28 December, 2010)
The European Central Bank failed to fully neutralize the extra liquidity created by its bond purchases for a second time since the program began in May.

The Frankfurt-based ECB said today it drained 60.78 billion euros ($80.66 billion) from money markets via seven-day term deposits, almost 13 billion euros less than the 73.5 billion euros it intended to absorb.

Banks tend to prefer to hold on to cash at the end of the year, when liquidity needs increase, said Karsten Junius, senior economist at Dekabank in Frankfurt. "The allotment therefore doesn't mean much for the situation in the money market," he said.



Keynesianism is intellectually hard, as evidenced by the inability of many trained economists to get it - Paul Krugman
by Carrie (migeru at eurotrib dot com) on Thu Feb 24th, 2011 at 04:22:30 AM EST
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A critique of the ECB's liquidity policies | 66 comments (66 topical, 0 editorial, 0 hidden)
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