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Policy Contribution

The ECB’s latest gimmick: Cash for loans

by Daniel Gros / Diego Valiante / Willem Pieter De Groen
29 March 2016

The ECB’s latest gimmick: Cash for loans

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Authors: Daniel Gros, Diego Valiante and Willem Pieter De Groen

Series: CEPS Policy Brief   No of pp: 6

Among several important monetary policy initiatives decided by the European Central Bank on 10 March 2016 was the launch of a new set of targeted longer-term refinancing operations (TLTRO II), expanding on the previous TLTRO. In assessing this scheme, which might cost up to €24 billion, this Policy Brief finds that while it could become important, it is questionable whether it will achieve its goal of encouraging the extension of credit for new investment, as banks can easily window dress their loan book.

Daniel Gros is Director of CEPS. Diego Valiante is Research Fellow and Head of Financial Markets and Institutions at CEPS and the European Capital Markets Institute (ECMI). Willem Pieter De Groen is Research Fellow in the Economy and Finance unit at CEPS.


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The ECB’s latest gimmick: Cash for loans
Download Publication

3122 Downloads