James Moore: What are HSBC and Barclays embarrassed about?

The ECB yesterday provided a belated, but welcome, back-to-work prezzie for Lloyds' chief executive, Antonio Horta-Osorio, in the form of €13.5bn of (ultra) cheap money. Ostensibly the cash is intended to fund lending on the Continent, but when you have funding issues like Lloyds, every little (and every lots) helps.

Meanwhile, HSBC was in for €350m, which doesn't sound like much, until you realise it gobbled up €5.2bn last time around, and has portrayed itself as a paragon of virtue for not needing state funds. And the ECB money would be?

At least HSBC admitted that its nose was in trough, unlike Royal Bank of Scotland and Barclays (another bank that bangs on about not needing direct state help during the financial crisis). The obvious conclusion to draw from their silences is that they borrowed so much they're embarrassed about it.

In the meantime, the ECB has averted a crisis. For now.

Some of the cheap money may indeed finance a few loans, but quite a bit will be spent on bonds from countries like Spain and Italy (which should keep speculators at bay). It's a bit of a no-brainer: borrow at 1 per cent, spend the money on debt that yields more, make a big profit.

Some economists see many similarities in what the ECB is doing to quantitative easing, the Bank of England's programme of buying bonds to increase the money supply and boost the economy. The mechanics are different – the ECB is using commercial banks as proxies – but the net effect isn't that different. However, with more than €1 trillion spent so far and Germany pulling its hair out over the inflationary risks, this appears to be the end of the road. Appears, at any rate.