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Realistbear

Portugal Have Gone To E C B For Bailout Money

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http://www.ft.com/cms/s/0/fdf80714-7ec0-11df-ac9b-00144feabdc0.html

Portugal’s banks turn to ECB for €36bn
By David "Dave" Oakley, Capital Markets Correspondent
Published: June 23 2010 14:11 | Last updated: June 23 2010 14:11
The funding of Portuguese banks from the European Central Bank more than doubled last month, as financial institutions struggled to access international capital markets.
Portuguese banks borrowed €35.8bn from the ECB in May compared with €17.7bn in April, according to the Bank of Portugal.
The country was also forced to pay extremely high yields to sell five-year bonds as investors demanded big premiums amid the continuing worries over high debt levels in the eurozone.
It was forced to pay average yields of 4.657 per cent, almost 1 percentage point more than the 3.701 per cent paid at an auction at the end of May.
Steven Major, global head of fixed income research at HSBC, said: “These yields are approaching that magic number of 5 per cent that is likely to be charged by the European stability fund.
“If the yields keep going up at this rate, then they will be paying much more than 5 per cent next month, which is arguably unsustainable.
Separately, Moody’s said Greek banks had borrowed about €89.4bn from the ECB.
The credit ratings agency said Greek banks had virtually no access to the bond or short-term lending markets,
which had forced them to rely on funding from the ECB.

Despite the recovery talk it seems the problems are only just starting to emerge outside Greece. It might NOT be contained.

Edited by Realistbear

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It gets worse:

Christian Noyer, governor of the Banque de France, appeared to go further than other ECB council members in admitting that “some banks have started facing increasing funding problems”. He was speaking on Monday but markets only started to react on Tuesday.
Mr Noyer gave no further details but in an interview with
La Tribune suggested one reason for heightened nervousness was the expiry at the end of this month of €442bn in 12-month loans provided by the ECB a year ago.
:o
He said a “lack of confidence” resulting from concerns about eurozone sovereign debt was “translating into interbank market tensions”, but this would pass as the eurozone’s €440bn stabilisation facility came into place.

Even the French face soaring re-fi costs:

In its regular healthcheck on the French economy, the International Monetary Fund noted last week: “In spite of manageable and diverse exposures, French banks suffer from market perceptions of holdings to sovereign and country risk in Southern Europe, which is likely to increase refinancing cost.” Like other European banks, they face pressure on longer-term dollar liquidity.

Edited by Realistbear

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[He said a lack of confidence resulting from concerns about eurozone sovereign debt was translating into interbank market tensions, but this would pass as the eurozones €440bn stabilisation facility came into place.[/indent]

Even the French face soaring re-fi costs:In its regular healthcheck on the French economy, the International Monetary Fund noted last week: In spite of manageable and diverse exposures, French banks suffer from market perceptions of holdings to sovereign and country risk in Southern Europe, which is likely to increase refinancing cost. Like other European banks, they face pressure on longer-term dollar liquidity.

Just wait for the French production figures due out on 12th Aug. The rumour is that things are not going well, with slumping demand. We will see. But either way, the French are supposedly the second strand of strength holding Euroland together along with Germany. They are in more trouble than they admit and have leant far too much to the PIGS. It will take a miracle to resolve those debts satisfactorily when they cannot be repaid except by ECB printing bits of paper and pretending all is well. The markets know it is impossible and rating downgrades are going to continue along with rate hikes. It is not just 'perceptions of risk'. There is real risk of default on loans made by French banks to the tune of hundreds of billions of Euros, which should not have been leant.

Edited by plummet expert

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Guest spp

Insane!

We have savers getting Bugger all for their savings, yet more money in the system!

Mike

There are now only two ways of looking at it -

1. They manage to squeeze the hell out of everyone - debt slaves!

or

2. They system goes down - the fiat fraud is noticed by too many!

Number 2 should have happenned in 08, they just inadvertently bought us time to prepare!

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Insane!

We have savers getting Bugger all for their savings, yet more money in the system!

Mike

Very true actually, if they want to borrow money then pay more, just like the 'supply and demand' issues in the housing market :rolleyes:

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  • 152 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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