What is 'LTRO' and how does it work?

LTRO has done quite a bit to restore financial confidence, but may have little economic influence unless it encourages banks to ease lending standards. This latter seems unlikely when the pressures to boost capital and reduce external funding remain so strong..

If these banks are borrowing at a low rate of 1% it would be nice if they lent the money out to their customers at 2-3% and not 5-6%.

Better still put the new money in the bank account of all EU citizens, let us spend/invest it. The recovery will be well on the way.

Personally this LTRO thing is not gonna do anything, trying to get out of debt by going in to debt. Another 12 months they'll need some more free money.......

Buy gold and guns citzens

let's get this straight. the banks are short of cash because they won't lend their clients deposits to other banks who they do not trust to not go the way of RBS and Northern Rock, only in this case, it's that banks in Europe do not trust other banks with their client deposits in case banks go belly up (like Dexia and ABN Amro or Commerzbank). What the ECB has done is switch roles to lender of last resort to provide European banks with the money they won't lend to each other. Key point, as soon as a bank or Government accesses ECB funding it is because it is insolvent. The ECB provides only provides a bridging loan between the insolvent institution and its creditors with the lawyers and vultures picking meat off the carcass of the insolvent institution in the meanwhile. The ECB (and the Fed and and the Bank of England) is an enabler of banking profits (and staff bonuses) at the expense of society. It does have the advantage of being a private guaranteed monopoly. If you or I formed a trade association that rpinted vouchers and charged members one per cent per annum we would be arrested and sent to jail. If the ECB does it, it is legal and is another form of tax. The tax takes the form of higher interest charges levied on you and paid directly to bankers bonuses. The scare mongering of the banking monopoly implies that if you don't pay the bankers bonuses (extortion) you are going to lose everything you own. Your house, your job, your car, your pension, oh and your i-pad. The Governments support this creation of odious bridging loan (ECB) finance because they do not understand philosophy, economics, the law and have no moral fibre. Suck it up and buy real assets like gold that replace your bills and other outgoings like food, healthcare and utilities by buying shares in the companies that send you these bills until dividends cover each of these bills.

Surely you now need to explain from whence the ECB gets its funds? I bet that they simply print them - the whole system is a rort.