European Money Up, Loans Down; Or Why The LTRO Is Still A Failure

One of the more mythical aspects of the LTRO, at least during its conception, is that the ECB repo operation would facilitate the diffusion of credit and loans to the broader population (and only subsequently was it made clear that the LTRO was there merely to prevent the disorderly insolvency of European banks). Alas, today's liquidity update from Europe shows that absolutely nothing is happening as planned, because even as broader money may have picked up, loans are once again

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