The ECB's Latest Gimmick: Cash for Loans
CEPS Policy Brief, No. 341
5 Pages Posted: 18 Apr 2016
Date Written: March 29, 2016
Among several important monetary policy initiatives decided by the European Central Bank on 10 March 2016 was the launch of a new set of targeted longer-term refinancing operations (TLTRO II), expanding on the previous TLTRO. In assessing this scheme, which might cost up to €24 billion, this Policy Brief finds that while it could become important, it is questionable whether it will achieve its goal of encouraging the extension of credit for new investment, as banks can easily window dress their loan book.
Keywords: TLTRO, European Central Bank, ECB, monetary policy
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