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Thread: ECB lends 530 billion to banks

  1. #11
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    PeteEU's Avatar
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    Re: ECB lends 530 billion to banks

    So what... the Fed does it all the time.. The only difference is that these loans are 3 year instead of the usual shorter term that are used daily. A big wupti do...
    PeteEU

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    Re: ECB lends 530 billion to banks

    Quote Originally Posted by StillBallin75 View Post
    Just to clarify I'm sure you mean this in a figurative sense, right? When the Fed expands the money supply most of it doesn't literally come from the presses. It's done primarily through open-market ops.
    Figurative in the sense that the Fed isn't actually printing cash, they are increasing the size of the assets or liabilities on it's balance sheet. The capital, or money, used to finance these loans is created. In this instance, the ECB isn't directly increasing the money supply as the Fed would do with open-market operations since the ECB can't employ quantitative easing. They are effectively flooding the capital markets with cheap loans that don't have to be paid until maturity. I just said this money comes from the presses in order to distinguish it from taxpayer money.
    "There is an excellent correlation between giving society what it wants and making money, and almost no correlation between the desire to make money and how much money one makes." ~Dalio

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