New York Times
December 22, 2011
This week, the European Central Bank, under the energized leadership of Mario Draghi, took the desperately needed step of injecting hundreds of billions of euros into the Continent’s tottering banking system.
It is a short-term solution and not even the best possible use of the central bank’s resources, which should be used to buy government bonds from distressed economies like Italy and Spain to keep their interest costs manageable. But with confidence in Europe’s financial system evaporating and European Union leaders locked in an irrelevant discussion of how to assure long-term fiscal virtue, the central bank has saved the day — for now.
It offered all banks operating in the euro zone three-year loans at its very low interest rate (currently 1 percent). More than 500 banks took up the offer, borrowing a total of $640 billion, far more than expected.