ECB Case for QE Greatly Assisted by Loans

The European Central Bank’s second round of long-term loans came in at the low end of analysts’ estimates, bolstering the case for the institution to start large-scale quantitative easing.

The Frankfurt-based ECB said it allotted 130 billion euros ($162 billion) to euro-area banks at a fixed interest rate of 0.15 percent in its targeted longer-term refinancing operation. Estimates in a Bloomberg News survey ranged from 90 billion euros to 250 billion euros, with a median of 148 billion euros.

The TLTROs play a key role in President Mario Draghi’s drive to revive the euro-area economy by injecting as much as 1 trillion euros in liquidity into the financial system. Today’s offer will fuel the debate among policy makers over whether current stimulus is enough, or if they need to start buying assets such as government bonds.


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