Poor loan data pushes ECB towards full QE

The ECB’s second round of long-term loans came in at the low end of analysts’ estimates, bolstering the case for the institution to start large-scale quantitative easing.

The bank said it allotted €130bn to eurozone banks at a fixed interest rate of 0.15% in its targeted longer-term refinancing operation. These TLTROs play a key role in president Mario Draghi’s drive to revive the eurozone economy by injecting as much as €1 trillion in liquidity into the financial system.

Yesterday’s offer will fuel the debate among policymakers over whether current stimulus is enough, or if they need to start buying assets such as government bonds.