The European Central Bank (ECB) took €820.8 billion (about $1.08 trillion) in overnight deposits on Friday, a new record amount. The previous record of €777 billion (about $1.02 billion) was set last Thursday, following the second of the ECB’s long-term refinancing operations (LTRO).
The two ECB LTRO offerings pumped more than €1 trillion into the eurozone’s banks. The cash infusion comes at a 1% interest rate for three years, which most of the banks are using to repurchase old sovereign bonds in order to purchase new ones.
The ECB is hoping that at the end of three years all the eurozone’s sovereign debt problems will be solved. It had better be right.
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