I think I understand this completely: the ECB lends to the troubled banks at 1% so they can turn around and buy more troubled sovereign debt, clip the coupon, and use as collateral with the ECB for those loans. A brilliant carry trade! Yup - good idea. I guess Draghi was telling us the truth about not buying primary issue - he just set up the facility for the banks to do it themselves. I'm pretty sure that carry trades in this manner always end badly but high marks on creativity.