Thursday, Aug 21, 2008
One ECB source told The Daily Telegraph that over-reliance on the ECB funds has become an increasingly bitter issue at the bank because the policy amounts to a covert bail-out of lenders in southern Europe.
telegraph: "Nobody dares pinpoint the country involved because as soon as we do it will cause a market reaction and lead to a meltdown for the banks," said the source.
The latest data from the Bank of Spain shows that the country's banks have increased their ECB borrowing to a record €49.6bn (£39bn). A number have been issuing mortgage securities for the sole purpose of drawing funds from Frankfurt.
Posted by big chris @ 04:53 PM (619 views) Add Comment
15 Comments
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1. beartil2010 said...
Goddammit let the banks go to the wall! No bailouts, no taking questionable collateral. Let them fail!
2. renting2 said...
Motion seconded!!
3. Bystander said...
"What we should avoid is some kind of arbitrage by banks, which say they are going to go to central bank X, instead of central bank Y, because conditions are more attractive,"
.........Isn't Nationwide opening new branches in the Republic of Ireland just to tap into the money flow from the ECB. With all this flying around, why in the name of all that is good is the euro so strong???????
4. bystander said...
"What we should avoid is some kind of arbitrage by banks, which say they are going to go to central bank X, instead of central bank Y, because conditions are more attractive,"
........isn't the Nationwide opening branches in the Republic of Ireland just so it can tap into this massive flow of cheap money??? Why, with all this undercover bailing out going on in the Eurozone is the euro so strong?????
(this may appear twice, sorry, user, not computer error)
5. plato said...
In a nutshell :
"While this policy buys time, it leaves the ECB holding large amounts of questionable debt and may be storing up problems for later."
This will ensure trouble for the EU. It's absolutely crazy using taxpayers money to rescue private banks instead of improving infrastructure and strengthening the EU's reserves.
One solid reason for guaranteeing the future weakening of the euro.
6. tyrellcorporation said...
I really do have a bad feeling about all this.
7. Peeps said...
Ambrose again, yawn
8. icarus said...
What about all the EU rules about subsidies and state aid? Or does "pay us back when you can" or "give us your scrap metal as collateral" not count as aid? Or maybe it's OK if it's at the Euro level?
"We must push (the banks) to tap other sources of funding". Er...what would they be? Rights issues?
The talking head is a Not Wellink. Re-write that as Not Well Inc.- and you have the EU.
9. icarus said...
They won't tell us which country they have in mind for fear it would cause a meltdown there. German taxpayers must be happy not to be told where their money is going.
Still, it's a bit like saying last August that a Newcastle-based bank whose logo is worn by Newcastle United is going to the wall - but we can't tell you which one it is.
10. plato said...
This is the thing that annoys most. They break every rule in the 'Free Market's' book and then like weaklings in priveleged positions say : We won't tell you".
This STINKS--------- is undemocratic and authoritarian. Shame on such political manipulation.
11. gardeniadotnet said...
>Goddammit let the banks go to the wall! No bailouts, no taking questionable collateral. Let them fail!
They can't. There is now so much fear in the air that the next 'Northern Rock' will bring down the artificially supported house of cards.
12. alan said...
I thought Banco Santander had borrowed all the Euros to finance acquisition of another UK building society....
13. it_is_going_with_a_bang said...
When banks make a bad business decision and lend money to people 'at risk' of not paying it back then they should pay the price.
14. dude said...
@7 peeps, indeed, hit the nail on the head.
Typical Torygraph with it's anti-EU rubbish. It's not to say the EU doesn't have problems, but there are bigger problems in the heads of those in the Torygraph offices.
Ambrose again, indeed.
15. Urban Bear said...
Don't just left the banks fail, but stop the insane usury, which is the root cause, by making fractional reserve banking and tax subsidy of private corporations a criminal offence!