Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
The Irish banks got 100 billion or from the ECB and quite substantial sums from the Irish government.
That's just liquidity, in exchange for those 100 billion in cash, the Irish banks have to park more than 100 billion in assets, at the ECB's own valuation, as well as pay interest.

That replaces short term lending and deposits, not bonds which are long-term liabilities.

The once existing long-term bondholders continue to be long-term bondholders. Or have traded the bonds with other private bondholders since the ECB is not known to be buying bank bonds (at least, nobody is screaming bloody murder if they're doing it: they just complain about buying government bonds).

Keynesianism is intellectually hard, as evidenced by the inability of many trained economists to get it - Paul Krugman

by Carrie (migeru at eurotrib dot com) on Fri Feb 4th, 2011 at 11:38:31 AM EST
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