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Full-Text Articles in Political Economy
The European Central Bank's Three-Year Long-Term Refinancing Operations (Ecb Gfc), Aidan Lawson
The European Central Bank's Three-Year Long-Term Refinancing Operations (Ecb Gfc), Aidan Lawson
Journal of Financial Crises
The announcement of the three-year Long-Term Refinancing Operations (LTROs) by the European Central Bank (ECB) on December 8, 2011, signaled the beginning of the largest ECB market liquidity programs to date. Continued and increasing liquidity-related pressures in the form of ballooning financial market credit default swap (CDS) spreads, Euro-area volatility, and interbank lending rates prompted a much more forceful ECB response than what had been done previously. The LTROs, using a repurchase (repo) agreement auction mechanism, allowed any Eurozone financial institution to tap essentially unlimited funding at a fixed rate of just 1%. Because the three-year LTROs were so similar …