ECB: The tLTRO Was A Total Fail

Well well well, it turns out the epic tLTRO invented by the ECB was actually a huge fail, we really feared this would have happened

(original publishing date: 09/19/14)

Ok, it’s better to have tLTRO than to have nothing, but we’ve got to acknowledge that this is not really going as the ECB was hoping.

Let us give you some numbers:

1) Only 82,6 bln € alloted

2) The maximum amount of money the ECB was willing to lend  in the first auction to banks was 200 bln €

3) Everyone expects 267 bln € to be allocated in the first two auctions

We expect point 3 to be heavily reassessed (it will be really hard to get to 200 bln €).

If you want to visualize this disaster (tLTRO is here indicated as “LTRO 3″):

So, it looks like tLTRO may be way weaker than LTRO 1 and LTRO 2.

One more step towards a serious Quantitative Easing.