- Chris Clark, a London-based interest-rate strategist at ICAP Plc
Mario Draghi's pledge to do whatever it takes to save the Euro and the huge amount of cheap loans pushed indicators of stress in the continent's money markets down and eased tensions in the Eurozone this year. During the 2012, the Euribor-OIS spread, which is a difference between the euro interbank offered rate and overnight index swaps, dropped 0.85 percentage point to 0.12%. At the same time, the ECB held its main refinancing rate at an all-time low of 0.75% during its last meeting, pushing banks' borrowing costs down.
The ECB has lent financial institutions more than 1 trillion euros under its long-term refinancing operations since December and pledged its readiness to provide lenders with unlimited and cheap cash in order to boost the economy. Due to these bold actions, financial markets began to rebound in 2012 and are heading into 2013 with hopes of economic growth.
"The key catalyst behind this year's contraction has been Mario Draghi and the ECB," said Chris Clark, a London-based interest-rate strategist at ICAP Plc, the world's largest interdealer broker. "First through the three-year LTROs and later with Draghi's commitment to do whatever it takes and subsequent announcement of the outright monetary transactions."
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