Logo euro decorating around the ECB headquarters. / B. ROESSLER (AP)
The European Central Bank (ECB) opened today floodgates of cheap long-term money to the first of the liquidity auctions adopted in June to the bench with the proviso that it should allocate to facilitate credit, but the result was below expectations. In total, 82,600 placed Eurobanco million to a total of 255 institutions in the euro area, when most analysts thought it would with more than 100,000 million. With the results already on the table, market scholars considered that the industry was waiting for the next auction, in December, needs clearer funds. The interpretation also applies to the Spanish banks, which was about 15,000 million.
In addition, the 82,600 million auctioned will be allocated a portion of the repayment of the liquidity auctions three years of 2011, already mature, so the net financing is lower
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The Spanish authorities requested 15,000 million
Liquidity placed today ends in four years, pays a minimum interest of 0.15% and European banks are entitled to funds in a quantity equivalent to 7% of a portfolio of loans to non-financial private sector in the euro zone, excluding mortgages. This volume, counting today and auction scheduled for 11 December, totaling about 398,000 million cost for the sector.
The banks could dispose of it with the condition that they should allocate resources to inject credit called real economy, productive: business and consumers. In total, there will be eight TLTRO or litrona s, which is the colloquial expression that Spain auctions in 2011 and 2012 were called by their acronym: LTRO. The litrona today adds that T, target (target), because the ECB does not want the institutions the advantage to place in investment in government bonds or simply strengthen their balance sheets but are conditional upon the granting of credit. This requirement is one of the elements that some experts put forward today to explain why his calculations had been above the result
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The ECB will be forced to more aggressive measures if punctured upcoming auctions
” Placement December will probably be higher since many banks also the core of the euro zone presumably participate “Barclays analysts noted, which had been estimated at 114,000 million applications for this first hose down. The reason, in his view, is that in December “banks will have a clearer idea of your financing needs and strategy of lending to the real economy.” That is, the sector is not yet clear how much you are willing to open the tap of the loans. The key to commitment to grant a certain amount of credits will result from the review of quality of bank assets and the stress tests that the ECB will publish in October and scored what banks need to strengthen their capital element.
The ECB does not break under credit by country, but according to Bloomberg data handled by the largest financial database world, banks in Spain and Italy have captured at least 40% of the funds placed today . And within this package, the Italian authorities would be ahead, as Unicredit, the largest group in the country, and Intesa Sanpaolo, took 7,800 and 4,000 million, respectively.
The Spanish entities, total captured 15,000 million, according to data provided by the industry and market sources. Santander, the largest bank, has been awarded the highest volume, a total of 3,600 million, including 600 of its subsidiary in Portugal; followed by CaixaBank (3,000 million); Popular (2.847 million), the nationalized Bankia (2.700 million) and BBVA (2,600 million), reports Inigo Barron . BMN 360 million requested. They have given up by now take liquidity Kutxabank, Ibercaja or Liberbak, although could order 1,000 million.
Between the two auctions, Spanish banks may request up to 54,000 million euros. Nevertheless, Economy Minister Luis de Guindos said Wednesday that Spanish banks would request some 30,000 million.
“Banking whole has excess liquidity at this point may be 100 million euros, “says Jose Luis Martinez Campuzano, Citi, referring to the outcome of the auction for all banks. By December, the industry best meet your situation and needs after the stress tests and in the meantime, no matter how cheap you leave the litrona , can continue to be financed with short-term loans that have the same cost recalls Campuzano, in reference to the MRO (main refinancing operations) at 7 or 90 days.
If the demand for liquidity and credit flows do not increase with upcoming auctions, will increase pressure on the ECB to take stronger measures, such as massive asset purchases, known as quantitative easing or quantitative easing.
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