Banks lunged at the European Central Bank's first ever offer of three-year loans on Wednesday, taking nearly 490 billion euros (409 billion pounds), well above the 310 billion forecast in a Reuters poll.
Following are analysts' views on the tender.
RICHARD DRIVER, CAXTON FX ANALYST
The big figure was welcomed initially but huge demand for ECB loans is not exactly a massive positive and really just reflects the huge squeeze European banks are feeling at present.
Certainly this will help ease liquidity, as will last month's coordinated central bank action on dollar swaps, but it also highlights the gravity of the situation in the eurozone - so don't expect sustained euro gains.
The market will once again be left to conclude that EU officials are addressing the symptoms but not the cause of the current debt crisis.
CHRIS WHEELER, BANK ANALYST AT MEDIOBANCA IN LONDON:
It's helpful. It's more than a sticking plaster, although it's by no means the solution longer term. The solution to the sovereign is essential to deal with the solvency and liquidity issues around banks in the longer term.
But the liquidity issues are the most pressing and that's being addressed through this three year money. It shows people have taken on board the encouragement to get in early, to make sure they are well balanced and positioned to both refinance and to continue lending.
It will not just be the weaker banks, it will be the stronger banks too. They are being encouraged to do it and there's no stigma in doing so, so you can get the cheaper money and fill the gap.
CHRISTIAN SCHULZ, SENIOR ECONOMIST AT BERENBERG BANK
This is of course good news for euro zone banks. The number beats the previous record of 442 billion euros (the ECB allotted) in June 2009. It is highly unlikely now that banks in the euro zone will go bust because of liquidity shortage.
This is an invitation to buy government bonds especially for smaller, unlisted banks, which do not take part in the EBA stress tests. For large banks, which are listed and which will have to face another EBA stress test next year, the motivation to buy government bonds is lower, because they fear that EBA will require more capital for bank holdings of peripheral debt and that will dilute existing equity.
JONATHAN LOYNES, CHIEF EUROPEAN ECONOMIST, CAPITAL ECONOMICS
The very heavy take-up of the ECB's three year long-term refinancing operation (LTRO) provides some encouragement that banks' liquidity needs are being amply met.
But while this might help to address recent signs of renewed tensions in credit markets and support bank lending, we remain sceptical of the idea that the operation will ease the sovereign debt crisis too as banks use the funds to purchase large volumes of peripheral government bonds.
MARTIN VAN VLIET, SENIOR ECONOMIST AT ING
The take-up of loans is massive, and even higher than in the ECB's first 12-month longer-term refinancing operation (LTRO) of June 2009, which attracted demand of 442 billion euros.
However, the lower number of participating banks (523 versus 1121 previously) suggests that the take-up is currently less widespread - and probably more concentrated in banking systems in peripheral euro zone countries. We will be keeping a close eye on national central bank data over the next few weeks for further clues on which countries' banking systems tapped the three-year facility.
Today's allotment of three-year loans is equivalent to almost one and a half times Spain and Italy's combined sovereign bond issuance in 2012. However, we doubt whether the money will be used extensively to fund purchases of peripheral debt, given concerns about mark-to-market risks and possible reputation risks.
ANNALISA PIAZZA, NEWEDGE STRATEGY
The take-up was a massive 489 billion euros, much higher than the expected 300 billion euros. Liquidity on the banking system has now increased considerably.
In a nutshell, the three-year auction can been considered as successful in terms of adding liquidity to the banking sector. We believe most of the take up has come from EMU periphery's banks which have more problems with long-term fundings. However, given the large number of banks participating at today's auctions, we cannot rule out some core countries' banks have started to put on some carry positions.
ALINE SCHUILING, ECONOMIST ABN AMRO
The result was well above the consensus expectation of around EUR 300 billion.
It could also allow banks to engage in a carry trade, in which they would use the ECB funds to purchase higher yielding government bonds.
This seems to partly explain the unexpectedly strong demand for recent Spanish bond auctions, as well as the sharp decline in Italian and Spanish bond yields over the past few days. Looking forward, the next three-year LTRO will be allotted by the ECB on 29 February 2012. Since banks have high refinancing needs in the first quarter of next year, demand for this LTRO might be strong as well.
JAMES NIXON, SOCIETE GENERALE
This is good. It's a positive number, at the top end of expectations. You have to regard it as a positive result. This is at least a solid 240 billion euros (net) increase for banks. But it is still short of covering all of the banks' financing for next year. So, it could ease fears of a credit crunch somewhat.