Thursday, Oct 04, 2007
UK Banks are borrowing from the ECB rather than the BoE, hoping no-one will notice
Independent: Hamish McRae: Share prices seem remarkably sanguine if economic trouble is coming our way
"We still have a lot of strain evident in the money markets. It is intriguing to see reports that London banks are borrowing heavily in Frankfurt from the European Central Bank, rather than from the Bank of England, because they fear that borrowing in London would place a stigma on them."
Posted by paul @ 10:52 AM (411 views) Add Comment
2 Comments
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1. planning4acrash said...
Maybe the ECB is more secretive than the BOE when it gives out loans? But more to the point, interest rates are lower in Europe, why borrow at a penal rate above 5.75 when you can borrow at 4%. Sterling would have to fall a long way before this carry trade became unfeasible.
2. dohousescrashinthewoods said...
I heard one UK bank (not NR) has approached that Spanish investor who was thinking of buying into NR (but backed out). Implication was the bank was on the edge.