Mario Draghi did not expect. Instead, the banks came yesterday a lukewarm response to the first operation Tltro, or loans ECB addressed to businesses and households. It is not yet a final rejection, being the first of eight rounds of refinancing, but it is an alarm bell that signals an unexpected difficulties in expanding the budget Eurotower, as foreshadowed recently by the same Draghi, approximately 1,000 billion from current levels ($ 2 trillion).
A goal that seems distant after that loans to 255 banks amounted to just 82.6 billion euro (more than 23 have gone all ‘ Italy), an amount significantly lower than even the lowest estimate – $ 100 billion – circulated on the eve. Nothing to do, then, with the enthusiastic support of the two LTRO auctions of late 2011-early 2012, when the central bank had flooded the system with liquidity of around 1 trillion. So is likely to skip the roadmap that included a power consumption of 400 billion with the first two tranches of Tltro. In December, the new slice should indeed record accessions to 320 billion, a figure almost four times higher than that of yesterday.
A blocking calls, more than one cause. Last but not least, the low demand for credit due to a recovery in much of the eurozone is not seen. Second, some banks may have delayed participation until after the publication of the results of the stress tests and waiting to hear details on programs purchase Abs, which will be unveiled early next month.
If you actually wanted the ECB to increase its budget to the values of the beginning of 2012, it should then “integrate” with the rest of the plan purchases of securitized loans (Abs), maybe doing some shopping of securities rated below A-as airs, and collateralized debt obligations. These two measures, however, may not be enough. At that point, the Dragons would be only one round in the chamber: the launch of a quantitative easing itself, along the lines of the purchase of sovereign bonds by the Fed, which would, however, the firm opposition of the Bundesbank.
But 2015 might hold a few surprises even within the board of the ECB. From next January 1, with the entry of Lithuania, will introduce the rotation of the vote in the Governing Council to keep firm to 18 the number of members. A mechanism, which has always opposed by Germany, which does not involve the six components, including Draghi, the executive committee. The first to be excluded, as was the draw yesterday, will be, respectively, the governor of the Banco de España, Luis Maria Linde (included in Group 1 of which are also part of Germany, France, Italy and the Netherlands), and representatives of central banks of Estonia, Ireland and Greece. A Ignazio Visco, Bank of Italy governor, it will skip your turn in March and August 2015, while Jens Weidmann, head of Buba, will vote in May and October. When, perhaps, you will have to decide whether to pull out the bazooka arsenal of quantitative easing.
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