The kraken consumes all…ftalphaville.ft.com/blog/2009/09 … y-monster/
Posted by Tracy Alloway on Sep 25 13:18.
An elegant note out from UBS analysts John Paul Crutchley and Alastair Ryan on Friday — discussing the perils of the European Central Bank’s liquidity ops.
Here’s the crux of the problem, according to UBS:
In our view, the [European banking] sector faces a significant policy challenge to unwind the support mechanisms that have been put in place to stabilise the banking system. In particular, as we discuss below, there appears to be a substantial disconnect between the provider of liquidity in Europe (the ECB) which is supranational in fashion, and the regulatory apparatus that surrounds banks and remains wholly national.
This has helped create a liquidity monster, with the ECB committed to provide ever-greater amounts of funding to the European banking system without any clear exit route.
We get a mention as being in basket case 2. I believe we are also in basket case 1, although gaming is not the, eh, game… more like life support for the government. I think NAMA is a clear case of basket case 3…
Rarely
September 25, 2009, 2:40pm
#2
yoganmahew:
The kraken consumes all…ftalphaville.ft.com/blog/2009/09 … y-monster/
Posted by Tracy Alloway on Sep 25 13:18.
An elegant note out from UBS analysts John Paul Crutchley and Alastair Ryan on Friday — discussing the perils of the European Central Bank’s liquidity ops.
Here’s the crux of the problem, according to UBS:
In our view, the [European banking] sector faces a significant policy challenge to unwind the support mechanisms that have been put in place to stabilise the banking system. In particular, as we discuss below, there appears to be a substantial disconnect between the provider of liquidity in Europe (the ECB) which is supranational in fashion, and the regulatory apparatus that surrounds banks and remains wholly national.
This has helped create a liquidity monster, with the ECB committed to provide ever-greater amounts of funding to the European banking system without any clear exit route.
We get a mention as being in basket case 2. I believe we are also in basket case 1, although gaming is not the, eh, game… more like life support for the government. I think NAMA is a clear case of basket case 3…
Its an interesting thesis proposed by the authors. However my gut judgment is that although there may be problems with individual countries (us) the authors are making too much of the disconnect between the ECB and national authorities. I think that the ECB has the tools and competencies at its disposal to roll back the liquidity. I suspect that ECB will threaten and cajole national authorities into getting their house in order (where they are capable of doing so and changes are required). That will just leave the real basket cases (us) - will they just throw us to the wolves or will they dream up a new scheme especially for us?
Rarely wrote:
So NAMA is nothing to do with the ECB then?FFS who is underwriting it?WAke up will ya?,the ECB is going to bail out every last bust bank and government across the Eu,its just they aren’t as open about it as the Fed and the Bank of England.
Further update:ftalphaville.ft.com/blog/2009/09 … e-for-now/
ECB liquidity monster back in its cage, for now
Results from the ECB’s latest 1-year financing auction, held on Tuesday, revealed that the central bank allotted €75.24bn to eurozone financial institutions, much less than the €137.5bn analysts had expected.
To compare, the ECB’s previous auction, in June, saw €442bn of funds allocated.
The easiest way to interpret the drop in allotments, as Bloomberg notes, is to say that banks’ cash-needs must have eased:
However, there is another interpretation.
2Pack
September 30, 2009, 11:13pm
#6
aib and boi are in the covered bond issuing business nowadays…like the ECB told them eh ?
