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From the markets: ECB provides vast liquidity with second LTRO

March 1, 2012
The European Central Bank provided 800 banks with EUR530 bn (USD713 bn) in cheap three-year funds at its second Long Term Refinancing Operation LTRO.

That was a bit less than the median market forecast of EUR489 bn. Within only two months, the central bank has now injected more than EUR1 trillion into the financial system to counter frozen interbank lending, dampen tensions on euro bond markets and fight the threat of a credit crunch. In the first LTRO auction on 21 December 523 banks took a total of EUR489 bn. ECB president Mario Draghi recently urged banks to lend out the money they tap at the LTRO to businesses and private households to strengthen economic growth.