Eurozone Banks May Tap LTRO for 1 Trillion Euros
January 31, 2012
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Europe Update: Eurozone Banks May Take €1 trillion in Next LTRO Offering
The FT is reporting that European banks are preparing to tap the European Central Bank’s emergency funding program’s offering (the LTRO) on February 29, for up to twice as much as the ECB supplied in its debut &euor;489 billion auction last month.
The FT opines that such a move would provide further evidence of the sector’s liquidity squeeze.
Three bank CEOs told the FT that they will ask for two or three times as much money as they did in last month's auction.
The €1 trillion figure compares to a Reuters poll published on 30-Jan in Europe that showed traders expect the ECB to only allot €325 billion to the offering. The article notes the €325 billion consensus is significantly lower than the €489 billion taken down at the first LTRO on December 22.
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