Funding options wane as debt crisis intensifies


Development of balance sheet total of the Euro...

Development of balance sheet total of the Eurosystem (i.e., The European Central Bank and the central banks of the countries using the euro. Used on Kredietcrisis. To be updated regularly. Theoretically, this could be updated weekly, but I don't think I'll manage that. Data obtained from the ECB website, Statistical Data Warehouse, search query ILM.W.U2.C.T000.Z5.Z01. (Photo credit: Wikipedia)

By Kirsten Donovan – The latest escalation of the euro zone debt crisis, with Spain now taking centre stage, is closing funding markets for banks again.

“If you parked the ECB cash in government bonds then you’re losing money if you need to sell them to repay your own bondholders,” said Rabobank rate strategist Lyn Graham-Taylor.

“That has to worry banks. Effectively sovereigns and banks in Spain and Italy have become ever more closely tied together through the (ECB’s three-year tenders).” more> http://tinyurl.com/7sv48a2

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