from King World News
On the heels of yesterday’s announcement by Draghi and the ECB, today one of the greats discussed what the ECB has just unleashed upon the world.
Here is a portion of today’s note from Art Cashin: The Key To Draghi’s Proposal – My good friend, and fellow market veteran, David Kotok of Cumberland Advisors wrote a brief analysis on a key feature of Mr. Draghi’s proposal last week. As with everything David writes, it is clear and insightful. Here’s a bit:
Draghi and the ECB announced that they will start a series of targeted longer-term refinancing operations (TLTRO). The first will occur in June 2016. The term will be four years. The cost of this borrowing by a bank is likely to be a zero interest rate. But under certain conditions it will be at the negative policy rate. Thus the central bank will be paying the commercial bank to borrow from it.