Posted on 12/09/2011 5:45:56 PM PST by bruinbirdman
The eurozone banking system is on the edge of collapse as major lenders begin to run out of the assets they need to keep vital funding lines open.
Senior analysts and traders warned of impending bank failures as a summit intended to solve the European crisis failed to deliver a solution that eased concerns over bank funding.
The European Central Bank admitted it had held meetings about providing emergency funding to the region's struggling banks, however City figures said a "collateral crunch" was looming.
"If anyone thinks things are getting better then they simply don't understand how severe the problems are. I think a major bank could fail within weeks," said one London-based executive at a major global bank.
Many banks, including some French, Italian and Spanish lenders, have already run out of many of the acceptable forms of collateral such as US Treasuries and other liquid securities used to finance short-term loans and have been forced to resort to lending out their gold reserves to maintain access to dollar funding.
"The system is creaking. There is a large amount of stress," said Anthony Peters, a strategist at Swissinvest, pointing to soaring interbank lending rates.
CreditSights' weekly funding report said the ECB had effectively become the central clearer for the region's banks as lenders are increasingly distrustful about funding one another.
Bank deposits with the ECB now stand at their highest level since June 2010 at €905bn (£772bn) as lenders withdraw deposits held with their peers and put them into the central bank. At the same time, banks in major eurozone countries such as France and Italy have become increasingly reliant on central bank funding. This follows the trend seen in smaller countries like Ireland where lenders have effectively becomes taxpayer-funded "zombie" banks.
Alastair Ryan,
(Excerpt) Read more at telegraph.co.uk ...
Time to invest in a gold mine.
But, but, but, all of them said SOCIALISM WORKS!!!
Just like Obama.
Just like Obamma.
yitbos
honestly...I’ve heard this so many time it’s getting old...as old as the sky is falling
FASB 157 brought about the disintegration of what was once a financial-system bulwark, and Basel II is finishing it off.
Really. It's sickening. Let's get the collapse over already !!
I am curious to see what's on the other side....
Socialism must die if people are to be free and once again prosper.
Our economies are sufficiently tied together such that if the Eurozone goes, I would suspect we will go down not too soon afterward.
Before Basel III?
yitbos
They're still adding members:
From Al-Mustaqbal, Beirut
On December 9, Croatia signed its accession treaty to the European Union as the eurozone crisis rages and uncertainties linger over EU unity.
yitbos
Ah, that’ll send the Dow up. (Idiots!)
The solution is to deal with the assets and collateral.
Both should be marked to 2017 values now. The inflated value will provide the necessary cover to prevent the problems with inadequate cover ratios
Worries grow over IMF loans to Europe
SNORT.
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