Is ECB's €1trn cash boost just the tip of the iceberg?

The €1trn in cheap loans provided by the ECB since December is expected to be only the start of a wave of liquidity measures that store up problems for the eurozone.

Banks borrowed €529bn from the European Central Bank in the second tranche of its three-year long-term refinancing operation (LTRO) last week, slightly above consensus estimates, to add to the €489bn borrowed in December. ECB policymakers have been publicly cautious on the possibility of further stimulus, in keeping with the bank’s historical restraint regarding monetary policy. But fund managers said the central bank has shown its willingness to put a floor under asset prices when necessary. Guy de Blonay, manager of the £483m Jupiter Financial Opportunities fund, said the absolute ...