I'm afraid the answer is the latter:
European Central Bank's cheap money has just turned toxic banks into zombie banks - Telegraph: "ECB president, Mario Draghi, has effectively transformed the eurozone’s toxic banks into zombie banks, addicted to his supply of cheap credit to keep them alive. . . . These banks can make little impact on the real economy, and their main purpose in life is merely to survive and maintain the status-quo. They cannot afford to make loans and be the agents of Europe’s economic recovery as they remain too bloated with toxic debt and are, to all intents and purposes, insolvent. . . . tens of trillions of toxic debt still on their balance sheets. The ECB loans have bought time to begin fixing these problems, but it is not a cure in and of itself. . . the European banking system’s toxic debt burden will not begin to be solved until lenders are forced to make the scale of writedowns that banks in Britain and the US have done over the last four years. Be under no doubts, the European banking system remains broken at its core. The LTRO is merely the full body plaster cast hiding the cadaver inside."
