Banks 'to take advantage of ECB's 3-year loans'

21 December 2011

Financiers across the eurozone are set to take full advantage of the European Central Bank's (ECB) decision to offer three year loans from today (21 December).

That is according to the findings of a survey of industry experts conducted by Bloomberg, with 14 such professionals anticipating an average demand total of $384 billion from the institution in such terms.

Under the details of this facility, the ECB will loan cash to banks at whatever its benchmark rate is throughout the duration of the agreement - terms that will appeal massively to all lenders across the continent.

Jens-Oliver Niklasch, strategist at Landesbank Baden-Wuerttemberg in Stuttgart, told the news source this deal represents "basically free money" for banks.

"The conditions are unbeatable. Everybody who can will try to get a piece of this cake," he added.

Recently, president of the ECB Mario Draghi dismissed speculation that the institution will embark on an increased round of bond purchasing to aid the eurozone.

By Tony Aynsley

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