Blow for ECB stimulus plan after little demand for loans to banks

The ECB saw far less demand than expected yesterday for its new four-year loans to banks, raising doubts about a stimulus package it hopes will stave off deflation and revive the eurozone economy.

The launch of the scheme, a central plank of the ECB’s efforts to coax reluctant banks to lend, saw the eurozone’s central bank hand out €82.6bn of €400bn on offer to 255 banks.

Banks will get a second chance on December 11 to apply for the cash — granted at ultra-low interest rates on condition they lend it on to businesses.