Well, they didn’t do it yesterday after all. Instead, the ECB waited until today to make a huge injection of cash to help bailout the rapidly sinking European banking system – €178 billion to be exact.
The banks are due to repay this money in 7 days. Unfortunately, the ECB has found that banks have been a tad reluctant to do that in the recent past. So it has placed the banks on the naughty step and tried to reduce such liquidity injections – a strategy which, since the system is deceased, has not worked so well.
Last week, the ECB provided €27 billion in overnight money, but failed to collect €10 billion owed from previous loans. The banks involved begged like desperate gamblers that they still needed the money.
Should we expect a half-a-trillion euro bailout next week?