The ECB reports that in the week to Feb 1, its balance sheet fell by 160 bln euros top 2.77 trillion.  This is the largest decline since Jan 2009 and largely reflects the early repayment of the first LTRO.  It is the smallest the ECB balance sheet has been since just before the second LTRO a year ago.          In addition, new bank borrowing from the ECB has not replaced the longer dated funds.  In fact, on Friday, euro area credit institutions did not borrow overnight funds from the ECB for the first time in a month.   As we ... Read More