European bankers depressed by the miasma in Athens might cheer up a bit if they focused on news from Frankfurt instead. The recent unveiling by the European Central Bank (ECB) of a €1.1 trillion ($1.25 trillion) package of "quantitative easing" (QE)-the printing of money to purchase vast quantities of bonds-should be as heartwarming for them as a resurgence of the euro crisis is chilling. Cynics might be forgiven for thinking QE is a policy designed purely to aid financiers. Banks, after all, borrow vast sums of money (from bond markets, depositors and other creditors) to acquire financial assets (corporate bonds, say, or the promise to repay a loan with interest). Even looser monetary policy helps the banks on both counts. On the one hand, it is cheaper for them to borrow money as interest rates are pushed lower. On the other, to drive bond yields down the ecb will have to drive bond prices up. Banks, which own lots of them, will be the biggest sellers.
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