Thursday, April 12, 2012

Financiers finally spot ticking timebomb dangers of Draghi's LTROs

Ambrose Evans-Pritchard is back on form in the Telegraph this morning as like the euro crisis he too appears rewaken! This quote comes from his column, linked here:

The snag is becoming evident. Weaker lenders are merely parking the ECB's ultra-cheap funds in these bonds until they need the money to roll over their own debts. That is coming due since European banks have €600bn in redemptions over the rest of the year. Many are now stuck with losses that they cannot afford to crystalise.
"It is going to be a problem if the funding market does not open soon and they have to liquidate their holdings," said Guy Mandy from Nomura. "What the LTRO has done is concentrate systemic risk even further. If everything now goes wrong, it could go wrong in a hurry."

An even better report on present markets and investment opportunities came from The Slog yesterday linked here and on the new head of the ECB Draghi here.



Blogger Unknown said...

And the Greeks are already ahead of the game with their bartering system TEM which has even made the BBC in this report

8:11 AM  

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