The transcript of the Draghi interview with the WSJ is here. The story is behind a paywall.
WSJ: What’s the first statistic you look at in the morning?
Draghi: Stock markets.
WSJ: Do you look at the euro exchange rate?
Draghi: Not in the early morning.
He should be focused on bond spreads not the stupid stock market.
I was surprised too that there was no elation after the approval of the package and this probably means that markets want to see the implementation of the policy measures.
Or maybe there is a mountain of problems beyond Greece?
His comments on the LTRO suggest that there is a significant need and possibly significant demand.
Our last bank lending survey was done in between the time the first LTRO was decided and when it was executed, so it gives only a partial picture of what is happening. That picture was not positive. Credit was tightening all over the euro area in different degrees of intensity, more dramatically in the southern regions. We have to ask ourselves why this is so. The LTRO allotment (in December) was €490 billion. The return of shorter-term liquidity from the banking system before the LTRO was about €280 billion, so that the net injection was only €210 billion. And the bank bonds coming due in the first quarter were also about €210 billion. Therefore, it is likely that banks simply repurchased their own bonds coming due. We have avoided an even worse credit crunch.