ECB Actions: More Than Meets the Eye
The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK (TheStreet) -- In today's press conference, the new European Central Bank (ECB) president, Mario Draghi made it clear that he understands what the ECB can do to affect monetary policy, he understands what political leaders must do to deliver fiscal stability, and he understands that Europe's growth prospects have been lowered for 2012 and the ECB must take on non-standard measures to limit the damage.
In addition to lowering the key ECB lending rates by a quarter point, Draghi announced several non-standard measures to facilitate lending and liquidity. This includes extending the lending duration of longer term refinance options (LTRO) to 36 months. Twenty-four months had been anticipated. Among other things, in the first quarter of 2012, $230 billion of bonds are coming to maturity and this measure will facilitate refinancing.
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