Tag: european central bank

European Banking Union Explained

European Banking Union Explained

Financial Markets Explained
The much talked about European Banking Union proposals has been making news on and off. For a complex set up such as the European Union which is comprised of various sovereign countries, in this article we explain the basics of the European Banking Union, the purpose of setting up the banking union and its far reaching implications on the Eurozone member countries. If one has to summarize the EU Banking Union proposal, it can be said that the idea is to break the vicious circle between the banking systems and their respective governments in order to create buffers of financial 'safety nets' to avoid a repeat of the financial crisis. European Banking Union - Brief History & Context The idea of establishing a common banking union across the Eurozone was highlighted after the Eurozone f...
What is LTRO Financing. ECB LTRO Explained

What is LTRO Financing. ECB LTRO Explained

Financial Markets Explained
LTRO is defined as the Long Term Refinancing Operations by the ECB or the European Central Bank. While LTRO has been around for the while, it came into the spotlight as LTRO was predominantly used in order to tackle the European debt crisis. The LTRO is primarily used as a mechanism to spread liquidity into the banking system itself. The LTRO is used in reference to Quantitative easing in order to stimulate/inject liquidity into the lending bank's national economy. To put it simply LTRO is nothing but the operations involving lending money by the ECB to other Eurozone banks at low interest rates. This was used by the Euro zone banks to in turn purchase high yield assets to make a profit or could also be passed on to businesses and consumers, which impacted the economy. LTRO's are usuall...