Wednesday, November 28, 2007

Institutions hoarding cash

ECB to pump €30bn into money markets

The European Central Bank has promised to supply the money markets with an extra €30bn (£22bn) in one-week funds, in another indication that the credit crisis is far from over. The ECB sold €178bn of these funds to eurozone financial institutions, compared with the €148bn it had previously said the banks would need for routine business. The New York Federal Reserve announced on Monday it was implementing several measures to increase liquidity in the parched credit markets. The Fed and ECB actions are designed to quell fears that there will not be enough money available to the markets, as financial institutions "hoard cash".

Posted by alan @ 08:42 AM (1925 views)
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2 thoughts on “Institutions hoarding cash

  • dohousescrashinthewoods says:

    “Inflation, inflation, inflation.”
    “We pride ourselves on boom and bust. There will be no return to economic stability”

    😉

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  • If they are hoarding cash, then what’s the point in giving them more cash? I would have thought that they would only hoard the extra cash or use it to buy gold?

    There is no shortage of money, just the difficulty of some borrowers (e.g. a well-run business looking to buy expensive equipment in order to expand) to get credit.
    Surely inflation is the big issue here.

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