Ach, it's only money

Look, it may sound crazy (though not as crazy as Rebekah's horse), but it's not that complicated.  The Guardian explains:

The European Central Bank will on Wednesday step up its campaign to stabilise the euro, forestall a new credit crunch and shore up troubled banks by flooding the markets with hundreds of billions' worth of easy money for the second time in two months.
The offer of three-year loans to banks at the cheap interest rate of 1% represents a boon for the banking sector in the troubled eurozone periphery, and is broadly seen as a masterstroke by ECB president Mario Draghi of Italy (pictured), who launched the policy in December in one of his first moves as president.
Analysts speculate that the take-up of what amounts to a eurozone policy of quantitative easing could reach €1tn (£850bn) when the funds are made available, the expectation is that the borrowing will roughly equal the first round of lending in December when more than 500 EU banks netted €489bn.

So the ECB lends vast amounts to the banks at a paltry interest rate who then proceed to buy up the sovereign debt of peripheral countries, yielding a much better rate of interest.  So everyone's happy: the banks make a tidy profit, the peripheral countries sell off their debt more cheaply than would otherwise be the case and the ECB is lauded for bringing aboout financial stability.  It's just like magic.

There's a flaw there somewhere, however; I just haven't spotted it yet ...