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3 Jul 2014
ECB is playing “smoke and mirrors”.
FXStreet (Guatemala) - Analysts at Rabobank explained that the ECB President doused the market with a fresh set of details on the modalities for the new TLTRO operations, which are set to be launched September and December.
Key Quotes:
“Seeing the details, one would almost think that the ECB is playing a game of “smoke and mirrors.” But of course the TLTROs are – potentially at least – an important instrument that may help repair the transmission channel of monetary policy”.
“First of all, the modalities allow, under specific circumstances, that banks form a group to apply for the TLTROs. This may be seen to address concerns that the eligibility criteria, which are set at the counterparty level, could constrain the aggregate uptake in the operations”.
“Secondly, the modalities introduce different benchmarks for “deleveraging” and expanding banks. On balance, we think this will be positive for take-up levels”
Key Quotes:
“Seeing the details, one would almost think that the ECB is playing a game of “smoke and mirrors.” But of course the TLTROs are – potentially at least – an important instrument that may help repair the transmission channel of monetary policy”.
“First of all, the modalities allow, under specific circumstances, that banks form a group to apply for the TLTROs. This may be seen to address concerns that the eligibility criteria, which are set at the counterparty level, could constrain the aggregate uptake in the operations”.
“Secondly, the modalities introduce different benchmarks for “deleveraging” and expanding banks. On balance, we think this will be positive for take-up levels”