The European Long-Term Refinancing Operation is inadequate according to analysis by the Wall Street Journal. This is because the borrowing of money via the European Central Bank's lending operation does not require or guaranty purchase of European Sovreign Debt. In other words, since European bonds represent a certain amount of risk, particularly in the cases of Spain, Italy, Portugal and Greece, banks may not want to overload their balance sheets with too much to avoid higher risk.
Since Eurozone banks are experiencing liquidity problems due to risk exposure, the problem is self-perpetuating. Moreover, because of banks' holdings of assets such as Greek bonds, the riskiness of their assets caused borrowers to hold back or increase cost causing refinancing issues. The ECB responded with the LTRO and other measures to help relieve this, however, buying more high risk debt is definitely a gamble going into 2012. In order for the ECB Open Market Operations to be successful, similar measures used by the Federal Reserve Bank might be more effective as it directly, rather than indirectly addresses the issue.
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