Let's Look at the ECB's Balance Sheet

Bank lending has actually made a blip higher, interestingly enough. The LTRO has been replaced by the "TLTRO," which is basically the same thing with a different acronym. So, this could conceivably expand more in the future.


Base money has contracted along with lending to banks. Thus, total bank reserves are rather low these days. European banks have a lot of reserves held at the Fed instead of the ECB. As the ECB pursues its QE at a rate of 60 billion euros per month or 720 billion euros per year, base money and bank reserves will expand again. It will be interesting to see how that works out, in terms of banks' holdings of reserves, particularly at the Fed.