What is LTRO?

The long term refinancing operation (LTRO) is a cheap loan scheme for European banks that was announced by the European Central Bank (ECB) towards the end of 2011 in a bid to help ease the eurozone crisis.Round one was carried out on 21 December, when banks took €489 billion from the ECB. The loans are due to be repaid within three years at a rate of 1%, and a second round will be launched on 28 February, with the results of how much money was requested due on 29 February.As the eurozone crisis has escalated, banks have become less stable and have less money to lend. The objective of the LTRO is to boost cash flow in the market and avoid a severe credit crunch or collapse of the banking system."