Sovereign debt crisis: What traders are talking about
Here’s what I am hearing. At the end, I will tell you how far-fetched I think these things are.
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Browsing Tag
liquidity
The European Bank Run
What will the Europeans do here then? I am anticipating bailouts, liquidity injections and capital injections. But this is looking pretty dismal now so it is not clear if that will be enough.
German banks need recapitalisation of 127 billion: report
In order for banks to hedge against multiple defaults in the eurozone periphery, banks must increase the ratio of equity to total assets at least five percent, a German researcher has argued. Dorothea Schäfer worked out for the Frankfurther…
Why didn’t the Fed release a statement on the dollar liquidity bailout?
The Fed feels politically constrained due to its own machinations in the past and the likelihood it will engage in a muscular easing policy if and when the US economy double dips. It does not want to come under attack for this Euro bank…
The European Bank Bailout
Central banks are taking on quasi-fiscal roles because the fiscal agent is lacking as in Europe or is unwilling to take bold steps toward a permanent solution to a systemic problem. What we need is ring fencing of core deposit-taking…
A Glimmer of Hope
European stocks rally for a fourth day ahead of outcome from ECOFIN meeting; US futures tread lower. Coordinated policy action good step; further support for EFSF/Greece needed to hold momentum. CNY continues to be used by Beijing as a tool…
Some Thoughts On The ECB/Fed Announcement
Today’s announcement that the ECB has coordinated with the Fed to give unlimited US dollar access to European banks through year-end was taken positively by markets. The euro strengthened and equities rallied. Clearly, this was something…
Why is the Fed lending dollars unsecured to the ECB… again
It remains my position that Congress should not allow the Fed to lend unsecured to foreign central banks without specific Congressional approval. But the Fed does currently have that authority and they are again using it to keep $ LIBOR…
Additional US dollar liquidity-providing operations over year-end
A statement by the Bank of England on market liquidity to be provided in co-ordination with other major international central banks.
Herbert Hoover: On Bank Liquidity and Solvency, 1931
This is excerpted from the American Presidency Project at UCSB. Hoover writes the following letter to George L. Harrison, Federal Reserve Board of New York, on financial and economic problems on 5 Oct 1931