Danske Has a Checklist for the ECB Decision on Long-Term Funding

(Bloomberg) -- With European Central Bank officials looking inclined to take their time on a decision to renew long-term bank funding, some analysts are wondering whether such a measure is warranted.

ECB President Mario Draghi said in January that the Governing Council would need to see a “monetary-policy case” if it decided to renew some form of long-term liquidity for banks. While most economists surveyed by Bloomberg had previously expected an announcement on the issue by March, Danske Bank has now abandoned this call, adding that the ECB will keep so-called TLTROs in their toolbox should they be needed.

Bloomberg reported earlier this week that central-bank officials see no urgent need to offer new long-term loans to banks and aren’t certain to do so at their next policy meeting in March, according to people familiar with the matter.

Here are the arguments in favor and against renewing the measure, according to analysts Piet Christiansen, Sverre Holbek, and Aila Mihr:

To contact the reporter on this story: Carolynn Look in Frankfurt at clook4@bloomberg.net

To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Brian Swint, David Goodman

©2019 Bloomberg L.P.