02/11/18

"Only A Serious Economic Shock": ECB Said To Consider New T-LTRO; Euro Tumbles



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"Only A Serious Economic Shock": ECB Said To Consider New T-LTRO; Euro Tumbles
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2012 was a seminal year for Europe and the ECB: that was the year when tensions in Euro markets receded in the second half of 2012, following Mr. Draghi's seminal "whatever it takes" intervention in July of that year. The resulting containment of re-denomination risk in the Euro area and the wider improvement in market sentiment that followed helped re-establish a basis for better functioning of private markets. As a result, the need for central bank intermediation of intra-Euro area cross-border financial flows diminished.

But just as importantly, that was also the year when the ECB's balance sheet had peaked shortly after the first 3-year Longer-Term Refinancing Operation (LTRO) was conducted...

... and whose runoff resulted in a .....

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