The three-year Long-Term Refinancing Operation (LTRO) has seemingly led to large losses at Spanish and Italian banks on sovereign bonds bought with ECB funds. "The banks are deeply underwater. This is turning into a disaster for the eurozone periphery now that the liquidity tap has been turned off," said RBS Credit Chief Andrew Roberts. "But given the opposition in Germany, the ECB can't easily do another LTRO until there is a major crisis."
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