The European Central Bank adopted a series of easing policies earlier, including the 1. rate cut: to reduce the leading interest rate to 0.15%, the marginal deposit rate to -0.1%, the euro area's first negative interest rate; 2., the new push TLTRO (directional long term refinancing operation) injecting about 400 billion Euro Liquidity; 3. announced that the QE will be tightened up (but not yet started); 4., the suspension of the securities market project will be suspended, and the central bank will expand its balance sheet.

The following will explain the negative interest rate of the European Central Bank and the specific policy of TLTRO.

First, Negative marginal deposit rate It is the overnight lending rate between the central bank and commercial banks, not the interest rates between commercial banks and individuals. The average bank deposits in the eurozone are still positive interest rates, but they may be lower than before. -0.1% marginal deposit rate means that commercial banks will pay 0.1% of the rate of money in the central bank, rather than the previous no need to pay (marginal deposit rate before zero), and not more common interest rates in other countries, that is, the central bank will still pay some interest to the commercial banks that save money. The ECB's negative deposit rate is undoubtedly the hope that commercial banks will lend to support economic growth.

Second, the European Central Bank has launched three rounds of LTRO (long term refinancing operation), but today launched the TLTRO (directional long term refinancing operation). Its orientation means to point to family and non-financial enterprises, and more specifically to the real economy. However, participation in refinancing does not include home purchase loans. The aim of the ECB's launch of TLTRO is to encourage banks to lend to households and non-financial enterprises (excluding housing loans).

Be-all TLTRO It will expire in September 2018. term About 4 years, slightly longer than the previous LTRO. In TLTRO, the central bank's counterparties (banks) will initially be authorized to lend 7% of the total loans to the euro zone's non-financial private sector as at April 30, 2014. Similarly, home purchase loans, as well as loans to the public sector, can not be included in the total amount of loans as the above mentioned base.

The ECB expects to be authorized to lend TLTRO funds of about 400 billion euros. This means that the TLTRO's easing is about 400 billion. The two TLTRO of the European Central Bank will take place in September 2014 and December. In addition, from March 2015 to June 2016, all the counterparties could borrow the most from the ECB, which is more than 3 times longer than the long term (determined by the European Central Bank).

The interest rate of TLTRO will be fixed during the period of each operation, specifically when the main refinancing operating interest rate (i.e. the euro area benchmark interest rate is now 0.15%) plus 10 basis points spreads. Every 24 months after the start of TLTRO, the opponent can choose to repay the loan to the central bank. The European Central Bank will identify a series of operational terms to ensure that funds are used to support the euro zone's real economy.