正文
consider this 11/30 from Bloomberg:
TheECB, the Bank of England and the Federal Reserve have all offeredemergency funds this week to soothe concerns that credit conditionswill deteriorate at the end of the year....
''Central banksdon't have the tools to arrest this rise in Libor because the issue isno longer about liquidity, it's about credit concerns,'' said JohnWraith, London-based head of U.K. interest-rate strategy at Royal Bankof Scotland Plc, the second-biggest U.K. bank. ''If banks aren'twilling to lend to one another, there's nothing central banks can do.''
Thegap between the rate on three-month interbank euro loans and the ECB'sbenchmark rate, which currently stands at 4 percent, is the highestsince the central bank took charge of monetary policy in 1999....
Bankof England Governor Mervyn King said yesterday there's a risk a furtherdrop in asset prices ''might impair the balance sheets of the bankingsystem in the U.S., which would lead to a classic credit squeeze.''
Kingdrew a distinction between the rise in credit costs in August andSeptember, stemming from the plunge in the U.S. market for subprimemortgages, and the latest increase. He said the first round wasdriven by concerns about banks' liquidity and the latest by concernsabout the health of their balance sheets. (emphasis added)
Allthe "printing" in the world cannot force borrowers to borrow when deepuncertainty and/or overaccumulted debts stand in the way... theso-called money supply is not always a free flow, not always a flow atall.
TheECB, the Bank of England and the Federal Reserve have all offeredemergency funds this week to soothe concerns that credit conditionswill deteriorate at the end of the year....
''Central banksdon't have the tools to arrest this rise in Libor because the issue isno longer about liquidity, it's about credit concerns,'' said JohnWraith, London-based head of U.K. interest-rate strategy at Royal Bankof Scotland Plc, the second-biggest U.K. bank. ''If banks aren'twilling to lend to one another, there's nothing central banks can do.''
Thegap between the rate on three-month interbank euro loans and the ECB'sbenchmark rate, which currently stands at 4 percent, is the highestsince the central bank took charge of monetary policy in 1999....
Bankof England Governor Mervyn King said yesterday there's a risk a furtherdrop in asset prices ''might impair the balance sheets of the bankingsystem in the U.S., which would lead to a classic credit squeeze.''
Kingdrew a distinction between the rise in credit costs in August andSeptember, stemming from the plunge in the U.S. market for subprimemortgages, and the latest increase. He said the first round wasdriven by concerns about banks' liquidity and the latest by concernsabout the health of their balance sheets. (emphasis added)
Allthe "printing" in the world cannot force borrowers to borrow when deepuncertainty and/or overaccumulted debts stand in the way... theso-called money supply is not always a free flow, not always a flow atall.
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