From the FINANCIAL TIMES:
…The ECB, under new president Mario Draghi, launched its funding facility in December to avert a looming credit crunch, with €230bn of bank bonds coming due for repayment in the first quarter of 2012 while bond markets remained largely closed to new issuance. …
Goldman Sachs has told clients that banks could ask for twice as much in the February auction as in December when more than 500 lenders raised €489bn. “They could do another €1tn easily in February,” said one senior banker. “It could be way more than that if things get worse in the markets.”.
Analysts suggest banks have used some of this money to invest in higher-yielding eurozone sovereign bonds, helping to drive down borrowing costs for several hard-pressed eurozone governments, including Italy, Spain, Ireland, and Greece…
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EDITOR: The U.S. Federal Reserve set the example.
