Differing views of LTRO results

As we await the results of LTRO2 at about 5am tomorrow morning, the total amount borrowed can be interpreted in different ways. If its well above 500b euros, we can say that a)European banks really needed the money or, b)we can say banks are of course taking advantage of cheap 1% funds where they in turn can make a healthy spread return or c)we can say more QE is good for asset prices. On the other hand, anything well below can be interpreted as either a)banks don’t need the money anymore as things have calmed down and their balance sheets look better or b)how can they not want 1% funds or c)there is not as much money/QE in the system now as expected due to the lower than thought take.

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