Amazing, from CBA:
The outcome: LTRO II lending was €529.5m (800 institutions) vs LTRO I of €489m (523 institutions) in December.
We estimate that the net increase estimated is ~€320b. (€85b reduction in MRO, roll off of st facilities €44b; OT differential €80b) vs €191b of fresh money in LTRO I. This makes this LTRO substantially larger than the prior version.
The offer was too good to refuse for a greater number of banks but the size was consistent, albeit high, with what our FX forecasters had expected based upon 2012 bank maturities and the roll off of short term ECB facilities into longer term funding.
With solid demand for cheap ECB term funding the risk of a near term bank funding crisis has been reduced and and the funding profiles for a number of weak banks would have improved. While some banks may feel there is a stigma with tapping the ECB the reality for many banks in Greece, Portugal, Ireland, Italy, and Spain is that public debt markets are not open for these banks anyway. However, LTRO is evidence that the interbank market is still not functioning.
According to the WSJ, several banks acknowledged their participation but most declined to disclose the amount. Banks that have stated they did not participate include ING Groep; ABN Amro; ASR Nederland; Standard Chartered; Rabobank. Banks that did include Erste Group Bank; Dexia; KBC (€5b); Aareal (€1b); Bank of Ireland; Allied Irish; Intesa (€24b); UBI (€6b); BPI; Espirito Santa; Comercial Portuges; CaixaBank; BBVA (~€11b); BCIV (€6.1b); HSBC (€350m); Lloyds (GBP11.4b).
