MNI SOURCES: Chances Rising ECB Will Announce TLTROs In March

     LONDON (MNI) - A fresh round of cheap funding for banks will be firmly on

the agenda of the European Central Bank's next meeting, with three eurosystem

sources telling MNI that chances were rising of an announcement of a fresh round

of targeted longer-term refinancing operations as soon as March 7.

     "By now it is almost certain that the issue of more TLTROs will be

formally, for the first time, addressed at the Governing Council meeting in

March. There will be no extension of current TLTROs, rather a new fresh round

with a slightly tweaked version compared to the latest ones and likely with a

2-year maturity," one eurosystem source said.

     "It would not be a surprise to anyone if a fresh round is announced tout

court at the March press conference," the source said, adding that "the exact

nature and scope of the new TLTROs might be communicated at a slightly later

stage and will take into account the overall financial outlook of the eurozone,

not the needs of specific countries or banks."

     Another eurosystem official told MNI that fresh TLTROs would be announced

in March, to be made available from May. A third source said that while it was

not certain that a final determination on TLTROs would be taken in March, it was

possible that a broad policy decision could nonetheless be announced at the

meeting, with details coming in April.

     Fresh TLTROs will differ from earlier rounds, and be "less of a subsidy for

banks", the third source said, stressing that March "will be an important

meeting."

     A fourth eurosystem source, though, was more doubtful, stating that there

was no consensus on the issue in the Governing Council and noting that it was

necessary to properly examine options including that of providing long-term

refinancing operations instead of TLTROs, as well as issues such as the

maturities of the loans, before taking a decision.

--MNI London Bureau; +44 203 865 3829; email: jason.webb@marketnews.com

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