http://fistfulofeuros.net/afoe/beyond-the-consensus-on-european-bank-credit/ European Opinion Mon, 13 Feb 2012 07:39:06 +0000 hourly 1 http://wordpress.org/?v=3.3.1 http://fistfulofeuros.net/afoe/beyond-the-consensus-on-european-bank-credit/comment-page-1/#comment-27594 Edward Hugh Thu, 29 Oct 2009 12:20:39 +0000 http://fistfulofeuros.net/?p=6411#comment-27594 Essentially I don't disagree Henrik. Essentially I don’t disagree Henrik.

]]> http://fistfulofeuros.net/afoe/beyond-the-consensus-on-european-bank-credit/comment-page-1/#comment-27578 Henrik Holleufer Wed, 28 Oct 2009 17:48:02 +0000 http://fistfulofeuros.net/?p=6411#comment-27578 As long as the commercial banks in Europe can buy their local government bonds, repo them at ECB and make 2-3% profit on this virtually risk-free arrangement, they will continue to do so as much as possible. This leaves less room in their capital base for other types of lending, and with government deficits around Europe set to rise dramatically in the years to come, this will continue to discourage the banks from performing their normal task of making liquidity available to other users. If ECB wants to conduct QE, they should do so in open market operations rather than in this stealthy fashion. Unfortunately this is very difficult to do under the current rules, so perhaps a change in their charter is warrented. As long as the commercial banks in Europe can buy their local government bonds, repo them at ECB and make 2-3% profit on this virtually risk-free arrangement, they will continue to do so as much as possible. This leaves less room in their capital base for other types of lending, and with government deficits around Europe set to rise dramatically in the years to come, this will continue to discourage the banks from performing their normal task of making liquidity available to other users. If ECB wants to conduct QE, they should do so in open market operations rather than in this stealthy fashion. Unfortunately this is very difficult to do under the current rules, so perhaps a change in their charter is warrented.

]]> http://fistfulofeuros.net/afoe/beyond-the-consensus-on-european-bank-credit/comment-page-1/#comment-27574 Snowblog - The boring figures that reveal a bitter truth Wed, 28 Oct 2009 10:59:06 +0000 http://fistfulofeuros.net/?p=6411#comment-27574 [...] to growth. In other words, in common with Britain’s banks, Europe’s bankers have scaled back on making credit available at an unprecedented [...] [...] to growth. In other words, in common with Britain’s banks, Europe’s bankers have scaled back on making credit available at an unprecedented [...]

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