ECB Stimulus Hampered Further

Mario Draghi is facing renewed pressure to implement quantitative easing after banks borrowed less than estimated in the European Central Bank’s first targeted-loan offer.

The Frankfurt-based ECB lent 82.6 billion euros ($106.5 billion) to euro-area banks at a fixed interest rate of 0.15 percent in its targeted longer-term refinancing operations today. That was below all predictions in a Bloomberg survey, which gave a range of 100 billion euros to 300 billion euros.

Spanish and Portuguese bonds rose, indicating that investors are betting the ECB president may ultimately resort to large-scale purchases of government debt as he strives to avert deflation in the euro area. Draghi has signaled he wants to boost the institution’s balance sheet to as much as 3 trillion euros from 2 trillion euros.


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