ECB Lends €530Bn To European Banks in Bid To Avert Credit Crunch!
- This is a sign that things are not well in the Eurozone banking system. Most major western banks are insolvent! Why would healthy banks run out of money to such an extent? You cannot solve a solvency problem with more liquidity. If a person is bankrupt, how does lending him even more money solve his bankruptcy? This is all about bailing out Illuminist banks to buy time, before the eventual collapse!
ECB lends €530bn to European banks in bid to avert credit crunch!
By Angela Monaghan, http://www.telegraph.co.uk/
The European Central Bank has taken action to stave off a potentially disastrous credit crunch by lending €530bn (£444bn) to 800 banks.
The ECB intervened to ease credit conditions in the European banking system by offering cheap three-year loans to banks to boost liquidity. It takes the total of the ECB’s funding “Bazooka” under its long-term refinancing operation (LTRO) to more than €1 trillion, after the Bank provided €489bn of money in late December. Mario Draghi, president of the ECB, has said that the first round averted a “major, major credit crunch”.
Sir Mervyn King, governor of the Bank of England, on Wednesday told the Treasury Select Committee that the ECB’s scheme had provided a crucial source of funding to banks, particularly in southern member countries of the eurozone, which had experienced a bank run in the second half of last year.
Ratings agency Standard & Poor’s said the ECB’s move had limited the risk of a bank failure. “We believe that the ECB’s intervention has materially reduced the risk of a liquidity-driven bank failure, and averted the possibility of a severe credit crunch and additional recessionary pressure across the Economic and Monetary Union. We also think that the ECB’s actions have helped warm up public funding markets from the deep freeze of late 2011, although investor demand remains selective,” it said.
… for more click here!
Sorry, the comment form is closed at this time.