The ECB’s Latest Gimmick – Cash for loans

Abstract:

Among several important monetary policy initiatives decided by the European Central Bank on 10 March 2016 was the launch of a new set of targeted longer-term refinancing operations (TLTRO II), expanding on the previous TLTRO.

In assessing this scheme, which might cost up to €24 billion, this Policy Brief finds that while it could become important, it is questionable whether it will achieve its goal of encouraging the extension of credit for new investment, as banks can easily window dress their loan book.

• Primary Source

ECB: Economic Bulletin, No,3, 2016: Focus: The second series of targeted longer-term refinancing operations (TLTRO II) https://www.ecb.europa.eu/pub/pdf/other/eb201603_focus03.en.pdf

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