The launch of the new 4-year lending facility by the European Central Bank was disappointing. Participation was light. Some 255 banks (of 382 eligible institutions, which represent more than 1300 entities) borrowed a total of 82.6 bln euros. The consensus was for 150 bln euros, and less than 100 bln was thought to a failure. Our expectation for poor results was based on three considerations. First, we feared a stigma so that strong banks would resist. Second, the Asset Quality Review and stress test (results next month) might deter participation. Third, prudence suggests that waiting for December, even if one wanted ... (full story)