Thursday, Aug 09, 2007
There's no sub-prime problem here, or is there?
BBC: ECB moves to help banking sector
The European Central Bank (ECB) pumped 95bn euros (£63bn) into the Eurozone banking market to allay fears of a credit crunch. The ECB brushed the gesture aside by stating it was a "fine-tuning" operation but the significance of this action is that it is the banks largest single intervention since 9/11. Ciaran O'Hagan, a Societe Generale analyst said, "the longer-term fear is that these liquidity issues could spill into the wider economy".
Posted by denzil @ 03:23 PM (148 views) Add Comment
5 Comments
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1. Moley20 said...
Where did this £63 billion come from? Is the ECB just printing money to give liquidity? and what is it's real worth
2. japanese uncle said...
Rest assured. There is no sub-prime problem in the UK, but just sub-standard or non-standard problems, which can be just worse. So the problem in the US is more visible as they can identify and define the extent of the problem. In the UK, as there is no clearly defined sub-prime business, so none can accurately grasp the extent of the potential loss. Dreadful!
3. harold said...
Central banks intervening so heavily in the markets? - sounds like socialism. Oh yes, I forgot - it's capitalism (but not as we know it).
4. Orwell said...
JU where do you get the opinion that there is no Sub Prime business?
David Smith on his site tells his readers that there has alway been a Sub Prime business?
Has someone said that officially there isn't ? Is there an official definition of a Sub Prime mortgage?
5. paul said...
That's it JU. Just like the term "corruption", "sub-prime" is as sub-prime is chosen to be defined by the interested party.
It is just a label of convenience but in reality the underlying problem is the same. ANYONE who has bought a non-conventional mortgage (self cert, interest only, 110%) is sub-prime.