Banks will take a total of €363 billion of the ECB’s initial TLTROs in September and December according to a Reuters poll. That’s a tough number to estimate and comes from a survey of money market traders.
The total available is €400 billion so that’s a decent take up. The operations will continue until June 2016 as the ECB tries to increase lending. The fear is the money will be placed in carry trades that do little to improve lending but add to banking bottom lines. Draghi warns safeguards will be put in place and there will be consequences for skirting the system but most traders believe it will descend into a banking subsidy.
“More cheap cash, bring it on,” one trader at a large dealer to Reuters. “All that these loans will do is add more liquidity in the system.”
