ECB Seen Finding Little Interest for Targeted Loans

The European Central Bank is likely to find little interest in a third offering of the long-term loans that it hailed as crucial for reviving growth and inflation before it turned to quantitative easing.

Banks will borrow 40 billion euros ($42.5 billion) from the Frankfurt-based institution under a program designed to bolster lending, according to the median of 24 estimates in a Bloomberg survey. Predictions ranged from 15 billion euros to 100 billion euros. The ECB allotted a total of 212 billion euros in two similar operations last year.

The targeted loans, or TLTROs, formed the center of President Mario Draghi’s plan to expand the ECB’s balance sheet by as much as a trillion euros when they were announced in June. Disappointing demand for the funds, which were charged at a premium to the benchmark interest rate, paired with a worsening inflation outlook prompted policy makers in January to add stimulus by pledging large-scale asset purchases.

Bloomberg

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