LONDON (MNI) – The potential for a third longer-term refinancing
operation from the European Central Bank is increasing, according to
ratings agency Fitch.
“The likelihood that a third longer-term refinancing operation
(LTRO) will be needed by certain banks in ‘peripheral’ eurozone
countries is increasing due to worries over eurozone sovereigns, limited
deleveraging ability and flat-to-negative deposit trends among other
factors,” Fitch said in a statement Tuesday.
Fitch said that the timing of any further LTROs is uncertain but is
unlikely to be imminent without a significant shock such as a Greek exit
from the euro zone.
“If a third LTRO is needed, we believe it will be provided,” Fitch
said in a statement Tuesday.
The first two 3-year LTROs injected around one trillion euros into
the European banking system and helped to ease wholesale funding markets
for non-peripheral European banks at the start of the year.
–London bureau: +4420 862 7499; email: ukeditorial@marketnews.com
[TOPICS: M$X$$$,M$$EC$,MAXDA$]
