After a harrowing 2011 for Europe's crisis-hit sovereign states – and the banks doing business within them – the European Central Bank's long-term refinancing operation has given the markets a much needed boost and offers hope for 2012. However, some still claim that it is little more than a sticking plaster for Europe's troubles.

Europe’s corporate bond market started 2012 at a ferocious pace as investors flocked to what they increasingly perceive as a safe haven. While issuance may slow later in the year, few believe the market is a bubble waiting to burst, and there is a widespread feeling that its heyday will last a good while yet. 

The European Central Bank's long-term refinancing operation has given bank funding – which crept along at a snail's pace in the second half of 2011 – a shot in the arm. But has it provided a long-term fix?

Europe’s MTN market has proved to be accessible for most SSAs and corporate borrowers since the start of the year. But it is a different story for bank issuers, most of whom are restricted to selling covered bonds.