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Michael Howell Benedicte Gravrand, Opalesque Geneva:

Volatility may reign, uncertainty may now be the norm in financial markets, but there are still some who bet on a rebound of the euro, rather than its death.

The European Central Bank (ECB) provided €489bn ($644bn) in 3-year emergency loans to banks against collateral in December — a step that has helped ease the crisis for now, reported AP. Italian, Spanish and Irish bonds have all rallied as banks used some of the ECB money to buy their debt, a profitable trade because the special three-year loans were so cheap, said Reuters. However Portugal, whose borrowing costs recently rose to alarming levels, has not benefited from this development.

As the crisis is entering its third year, the central bank will offer a second round of three-year loans at the end of this month (as central bank liquidity management means supplying to the market the amount of liquidity consistent with a desired level of short-term interest rates, through open market operations.)

According to Michael Howell, CEO of ......................

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