I'm a sucker for cheap wordplays, so here's another one: Before we all lose our sober look tomorrow (ta-taaa!, now click the link ;), take a brief moment to think about what might be coming next year... Maybe it will be negative deposit rates for European banks so as to increase the incentive to lend out instead of just carrying funds obtained from ECB LTROs. A possible implication is the reduction of TARGET2 balances and a move toward financial re-integration because of newly sparked search-for-yield behavior. Another outcome might be that solid banks just pay back 'unused' LTRO borrowings and go on about their business (or even be better off?) for a while whereas not-so-solid banks... well, let's just exercise a little more and quit smoking. Guten Rutsch!
By the way, I wonder whether 'allocation' is a euphemism or synonym for 'search-for-yield behavior' and whether all of this could be part of 'safeguarding monetary policy transmission.'
