Nor is the shift from direct lending to auction sure to work: for all the praise heaped upon the ECB, the spread between the ECB's repo rate and euro-denominated interbank rates is no less worrying than that in America or Britain.
The hope is that by extending the maturity of central-bank money, broadening the range of collateral against which banks can borrow and shifting from direct lending to an auction, the central bankers will bring down spreads in the one- and three-month money markets.