As the world counts down to Greece's vote, the ECB hinted another LTRO isn't on the cards just yet.

Then the head of the ECB reiterated that they would continue to lend to solvent banks but hinted that another 3-year LTRO wasn’t on the cards yet. The reason? Because the panic wasn’t as bad this time around – seriously. But there are positive implications from his comments. If people can panic enough, if they can just try that little bit harder – then the money will flow freely again. The reason why he was opposed to flooding the market with more crack (just one more hit, man, just one more!) is because there wasn’t a lot the ECB could do about things at the moment. There were two problems the way he saw it – risk aversion and a lack of capital – and its Draghi’s view that the ECB can’t fix either. They can’t force people to borrow or lend. Other than that he lent his support to calls for the permanent bailout fund, the European Stability Mechanism, to directly capitalise banks in need.


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