The ECB's Latest Gimmick: Cash for Loans

CEPS Policy Brief, No. 341

5 Pages Posted: 18 Apr 2016

See all articles by Daniel Gros

Daniel Gros

Centre for European Policy Studies, Brussels; CESifo (Center for Economic Studies and Ifo Institute)

Diego Valiante

affiliation not provided to SSRN

Willem De Groen

Centre for European Policy Studies (CEPS)

Date Written: March 29, 2016

Abstract

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

Suggested Citation

Gros, Daniel and Valiante, Diego and De Groen, Willem, The ECB's Latest Gimmick: Cash for Loans (March 29, 2016). CEPS Policy Brief, No. 341, Available at SSRN: https://ssrn.com/abstract=2766217

Daniel Gros (Contact Author)

Centre for European Policy Studies, Brussels ( email )

1 Place du Congres
B-1000 Brussels, 1000
Belgium

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

Diego Valiante

affiliation not provided to SSRN

Willem De Groen

Centre for European Policy Studies (CEPS) ( email )

1 Place du Congres, 1000
Brussels, 1000
Belgium

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