Why ECB Is Stuffing More Free Cash Into Bank Pockets

The European Central Bank is throwing every tool it has at a euro zone economy that’s gone from sluggish to nearly frozen in the face of the coronavirus pandemic. One branch of this effort involves generous funding offers to lenders in the region, an expansion of an approach it used twice before over the past decade to stimulate growth. It has also tweaked its negative interest rate policy to limit the punitive side effects.

It’s expanding a program called Targeted Longer-Term Refinancing Operations (TLTROs) and adding a new one called Pandemic Emergency Longer-term Refinancing Operations (PELTROs).