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As always, @fwred has the ultimate ECB analysis. "After whatever it takes, #WhateverTheF."
But with a cooler head, I'd like to point up that the package is a disappointment on govies/rates, but it's MASSIVE for banks.
But with a cooler head, I'd like to point up that the package is a disappointment on govies/rates, but it's MASSIVE for banks.
Just the new TLTRO thing is huge: the loan growth benchmark is now 0 (LOL), the amount available is now €2.3tn - and this will be at -0.75% And if you don't know what the do with the cash, depo at -0.5%. U can do the math of this subsidy.
And what about this buffer thing the SSM announced? Pretty sure the algos didn't pick up on that one. But if you add 2.5% (CCB) + 1.5% (average P2G) and multiply by the approx. 20tn€ RWA in the European banking sector...
