The European Central Bank (ECB) will announce today how successful the second round of its low-rate loan program to the euro zone's banks has been amid calls for the central bank to buy and lend more to help kick start the region's economy.
The second allotment of the targeted long-term refinancing operation (TLTRO) is expected at 10:15 a.m. London time and will be closely watched after a less-than-promising uptake at the last auction. The LTROs are cheap loans provided to euro zone banks and have been implemented by the ECB alongside the purchases of covered bonds and asset backed securities.
Critics have rounded on the loan program, however. Markus Schomer, the chief economist at PineBridge Investments, told CNBC Thursday that it was "ill-designed" and expected it to be a "huge failure."
Read MoreECB would have cut rates at last meeting: Praet
"The problem is how can you offer liquidity to the banks when you charge them for holding that liquidity with the central bank," he said regarding the negative deposit rate the ECB has issued alongside its credit easing measures. "I think that negates any effect that the TLTRO can have."
Joshua Roberts | Reuters
The ECB doled out 82.6 billion euros ($106.3 billion) in loans at its last auction in September. Analysts' median expectations in a Reuters poll this week suggested that banks have taken up around 130 billion euros ($162 billion) this time around. The news agency reported on Thursday morning that the main Italian banks were looking to take around 26 billion euros.
Robert Kuenzel, the euro area economist at Daiwa Capital told CNBC that a very good number would be around 150 billion euros and give the bank a few more months until it had to step up its program with a long-anticipated launch of a full sovereign bond-buying program along the lines of the U.S. Federal Reserve.
Read MoreDraghi's finger on trigger: Where next for euro?
"There's not an awful lot of time they've got left given that we've seen sinking headline inflation that will almost certainly continue in the coming months," he said. He personally expects Thursday's figure to be no more than 100 billion euros.
The European Central Bank (ECB) will announce today how successful the second round of its low-rate loan program to the euro zone's banks has been amid calls for the central bank to buy and lend more to help kick start the region's economy.
The second allotment of the targeted long-term refinancing operation (TLTRO) is expected at 10:15 a.m. London time and will be closely watched after a less-than-promising uptake at the last auction. The LTROs are cheap loans provided to euro zone banks and have been implemented by the ECB alongside the purchases of covered bonds and asset backed securities.
Critics have rounded on the loan program, however. Markus Schomer, the chief economist at PineBridge Investments, told CNBC Thursday that it was "ill-designed" and expected it to be a "huge failure."
Read MoreECB would have cut rates at last meeting: Praet
"The problem is how can you offer liquidity to the banks when you charge them for holding that liquidity with the central bank," he said regarding the negative deposit rate the ECB has issued alongside its credit easing measures. "I think that negates any effect that the TLTRO can have."
Joshua Roberts | Reuters
The ECB doled out 82.6 billion euros ($106.3 billion) in loans at its last auction in September. Analysts' median expectations in a Reuters poll this week suggested that banks have taken up around 130 billion euros ($162 billion) this time around. The news agency reported on Thursday morning that the main Italian banks were looking to take around 26 billion euros.
Robert Kuenzel, the euro area economist at Daiwa Capital told CNBC that a very good number would be around 150 billion euros and give the bank a few more months until it had to step up its program with a long-anticipated launch of a full sovereign bond-buying program along the lines of the U.S. Federal Reserve.
Read MoreDraghi's finger on trigger: Where next for euro?
"There's not an awful lot of time they've got left given that we've seen sinking headline inflation that will almost certainly continue in the coming months," he said. He personally expects Thursday's figure to be no more than 100 billion euros.
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