Total deposits rose 12% during the year, enabling Santander to repay 24bn euros of the long-term emergency loans it - along with most other banks in the eurozone - received from the European Central Bank last year.
The beneficiaries are loth to tie the cash up in long-term loans because they fear that the flows could reverse at any moment.
The private banks cannot meet the demand for long-term loans because they cannot raise enough long-term capital, for two main reasons: first, Brazilians are reluctant to tie themselves into long-term investments because of the recent memory of rampant inflation.
The European Central Bank said European banks are repaying long-term refinancing loans from the ECB at a slower rate than expected, which led to ideas the ECB will not be tightening its monetary policy any time soon.
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Page of Eaton Vance says the long-term default rate on these loans is in the 2.5% range but was higher during the dark days of 2001 and 2002.
Long-term low-interest loans help the banks themselves as well as put them in a position to buy European sovereign debt, an excess of which is the main problem.
The panic has sent long-term rates tumbling again: The rate on 30-year conforming loans is down to 5.07%, according to Bankrate.
Egypt's minister of culture said the Italian Government had offered Egypt feasibility studies, and the World Bank had offered to provide long-term loans.
Both rounds of the loans - dubbed long-term refinancing operations (LTRO) - included provisions to allow paying them off early, beginning at the end of this month.
It also provides long-term loans to the company.
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One part ("the bad bank") will assume all the residential and commercial real-estate loans and securitized mortgages as assets, and all the long-term debt as liabilities.
Loans provided by BNDES are based in the so called TJLP long-term interest rate, which currently stands at 5%, while traditional loans carry a premium over benchmark Selic rate, currently at 12.25%.
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Italy's reform effort quickly ran out of steam the moment the ECB made its offer of cheap, long-term loans to banks, while Spain offered only a half-baked reform of its banks.
It got papered over because there was a lot of cheap credit out there so people were just able to keep up by getting more credit cards and taking out more home equity loans, but the long-term trends were not good.
The bank rate is used to price medium- and long-term loans and is at its lowest level for three decades.
In addition to some of the former assets of Hokkaido Takushoku Bank, it will have to take on the bad loans of Nippon Credit Bank and Long-Term Credit Bank, both nationalised last year.
Long-term default is all-but-impossible, as those issuing loans for higher education have the right to garnish everything from tax refunds to Social Security checks in their quest to be paid back.
If growth peters out, bond yields will fall further but bad loans will rise and the difference between short- and long-term rates will narrow, since there is little scope for the Fed to push short-term rates down further than their current 1%.
For one thing, they are avoiding making long-term loans, a sign of funding difficulties, probably caused by the nonperforming assets they have been carrying on their balance sheets.
The momentum looks likely to continue, particularly because the ECB will conduct a second offering of three-year loans to banks, known as a long-term refinancing operation, or LTRO, at the end of February.
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