The Italian yield curve - the 2-year off (since Dec.) 550 bps to 2.23%, the 10-year off only 200...

|By:, SA News Editor

The Italian yield curve - the 2-year off (since Dec.) 550 bps to 2.23%, the 10-year off only 200 bps to 5.22% - shows the limits (distortions) of the ECB's LTRO, which offers cheap funding for only 3 years. Bank traders are happy to play with the near-free money in short maturities, but have little interest in taking serious credit risk.