Anxiety over ECB loans

DESPITE the widespread support for the European Central Bank’s decision to flood banks with cash in December, some bankers in Davos expressed anxiety over the long-term effects of the move.

One bank chief expressed anxiety that the loans are “changing the dynamics of the system permanently in ways that we can’t anticipate”.

The banker said that the ECB is now becoming the main source of liquidity for many lenders, rather than a back-up last resort, with unknown consequences.