16 Jan 2015
QE and excess liquidity running to stand still - Rabobank
FXStreet (Guatemala) - Analysts at Rabobank explained that the implications around the ECB next week.
"The natural inclination is to think that the introduction of a broad based sovereign QE programme by the ECB will herald a rapid increase in the size of its balance sheet, a concomitant increase in excess liquidity in the Eurozone (EZ) banking system and EONIA/ Euribor staying pinned near current levels."
"However, while this may be the case in the longer-term, the short term view is complicated significantly by factors including the existence of the negative deposit rate and the rapidly approaching maturity of the two 3yr LTROs."
"The natural inclination is to think that the introduction of a broad based sovereign QE programme by the ECB will herald a rapid increase in the size of its balance sheet, a concomitant increase in excess liquidity in the Eurozone (EZ) banking system and EONIA/ Euribor staying pinned near current levels."
"However, while this may be the case in the longer-term, the short term view is complicated significantly by factors including the existence of the negative deposit rate and the rapidly approaching maturity of the two 3yr LTROs."