The ECB will probably confirm at the forthcoming press conference that December’s provision of 12- month bank loans will be the last. Together with possible hints about phasing out 6-month lending next year, this might add to fears that the Bank will withdraw its unconventional policy stimulus too quickly. But, for now at least, the ECB is moving very gradually and the liquidity that has already been provided will be in the system for some time yet. What’s more, the prospect of only a modest recovery should keep official interest rates on hold for a long time.
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