The ECB has tied the amount banks can borrow to how much they lend.
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The European Central Bank has launched a new stimulus program aimed at getting banks to lend more – but low initial demand for its super-cheap loans shows the difficulty the ECB faces in trying to revive a stalling economy.The Central Bank for the 18-country eurozone Thursday handed out 82.6 billion euros ($107 billion) in ultra-low interest loans to 255 banks.Banks pay only 0.15 percent annual interest for up to four years for the loans.The low uptake underlined the ECB's difficulty in getting its stimulus measure through to the economy.The bank's balance sheet – a measure of the total size of its efforts to add money and credit to the economy – has been slowly shrinking as banks repaid earlier rounds of cheap loans.
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