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ECB May Not Renew Long-Term Loans Amid Recovery

ECB May Not Renew Long-Term Loans Amid Recovery (Bloomberg)

European Central Bank Executive Board member Benoit Coeure said the region’s banks may not need another round of the cheap long-term loans previously provided to fight the euro-area debt crisis and a recession. Standing credit facilities may be enough to ensure an appropriate level of liquidity, Coeure said. If not, the ECB would act, added Coeure, who is responsible for money markets at the ECB. “Tail risks are much more limited today than six months ago. So to that extent, we’re more confident in the recovery.” Coeure’s view shows a key ECB director expects financial markets to operate without the long-term refinancing operations that warded off a credit crunch two years ago. At the same time, he stressed that the central bank is still guaranteeing lenders as much short-term cash as they need until at least July 2015.

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European Central Bank Executive Board member Benoit Coeure said the region's banks may not need another round of the cheap long-term loans previously provided to fight the euro-area debt crisis and a recession.

archive

ECB May Not Renew Long-Term Loans Amid Recovery

European Central Bank Executive Board member Benoit Coeure said the region’s banks may not need another round of the cheap long-term loans previously provided to fight the euro-area debt crisis and a recession.

ECB May Not Renew Long-Term Loans Amid Recovery (Bloomberg)

European Central Bank Executive Board member Benoit Coeure said the region’s banks may not need another round of the cheap long-term loans previously provided to fight the euro-area debt crisis and a recession. Standing credit facilities may be enough to ensure an appropriate level of liquidity, Coeure said. If not, the ECB would act, added Coeure, who is responsible for money markets at the ECB. ??Tail risks are much more limited today than six months ago. So to that extent, we??re more confident in the recovery.? Coeure??s view shows a key ECB director expects financial markets to operate without the long-term refinancing operations that warded off a credit crunch two years ago. At the same time, he stressed that the central bank is still guaranteeing lenders as much short-term cash as they need until at least July 2015.

Written By

Paul Dykewicz is the editorial director of the Financial Publications Group at Eagle Publishing Inc., www.eaglepub.com, of Washington, D.C. Eagle publishes five free, e-letters, 10 weekly trading services and five monthly investment newsletters, Forecasts & Strategies, Successful Investing, Cash Machine, Growth & Dividend Report and The Alpha Investor Letter. He also is the editor of Eagle Daily Investor and the author of the inspirational book, "Holy Smokes! Golden Guidance from Notre Dame's Championship Chaplain."

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