eurosystem

Spanish Banks, Banco de España & TARGET2

15 May 2012

In two big operations in December and February, the Eurosystem lent around €1tn to banks in the Euro Area: (click to expand, source: ECB) Spanish banks it seems borrowed around €315bn (gross) as per the recently the Banco de España released statistic Financing In The Eurosystem (April 2012): (click to expand) Due to the continuing capital flight out [...]

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Deutsche Bundesbank’s TARGET2 Claims: Again!

22 March 2012

At the risk of boring readers, here’s Bundesbank’s TARGET2 claims again from its March 2012 Monthly Report. Cannot find the English version but the translation is below the first figure (with old data). This increased to almost €560bn at the end of February despite ease in financial market conditions in the Euro Area! (click to [...]

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Banco de España’s TARGET2 Liabilities: Again

19 March 2012

I had a post a month ago Banco de España’s TARGET2 Liabilities and this gets more interesting a month later. The bank released numbers for February and it seems capital flight is continuing from Spain and Spanish banks’ borrowing from the ECB rose in February. The following is from BdE (click to enlarge) The Spanish general government [...]

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Deutsche Bundesbank’s TARGET2 Claims

5 March 2012

Yesterday Wolfgang Münchau wrote an article in the Financial Times The Bundesbank has no right at all to be baffled in which he gave his opinion about Bundesbank President Jens Weidmann’s leaked letter to the European Central Bank President  Mario Draghi expressing concerns on the Bundesbank’s TARGET2 assets. According to the Bundesbank December 2011 Monthly Report, its claims on [...]

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Banco de España’s TARGET2 Liabilities

16 February 2012

Spain as a nation owes the rest of the world around €995bn according to the Banco de España International Investment Position data which is very high when compared to the 2011 GDP of €1,073bn. (And according to today’s release, real GDP fell 0.3% q/q in Q4 2011.) Although, credit conditions in domestic and international money markets and capital markets in [...]

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The (Almost) Irrelevance Of Reserve Requirements

29 January 2012

Earlier this week, the Reserve Bank of India reduced banks’ reserve requirements by 50bps. It’s called Cash Reserve Ratio and the RBI reduced it from 6.00% to 5.50% with effect from the following week. The Reserve Bank of India is one of the most backward central bank in liquidity management and sometimes panics and changes [...]

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The Eurosystem And Greek Government Debt

25 January 2012

Some bonds of the Greek government mature on March 20. The total principal amount is €14.5bn. The focus in the financial markets is what will happen to these securities and everyday we read about negotiations with the creditors on “private sector involvement (PSI)”. For the latest see this WSJ article Greece Private-Sector Creditors Meet in Paris. According [...]

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Bidding Behaviour In The Eurosystem’s December 3-Year LTRO

19 January 2012

On 28 December 2011, the Eurosystem conducted a large 3-year LTRO (Longer-Term Refinancing Operation) in which banks in the Euro Area bid about €489bn. I covered this in my post Today’s Eurosystem LTRO and I wrote that the LTRO was to help banks meet their funding needs and that they participated in it to roll over existing [...]

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Today’s Eurosystem LTRO

21 December 2011

On 8 Dec, the European Central Bank announced that it will conduct two Longer-Term Refinancing Operations (LTRO) with a maturity of 36 months – one each in December and February. According to the initial press release, The operations will be conducted as fixed rate tender procedures with full allotment. The rate in these operations will [...]

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Who Is Germany?

18 December 2011

In recent posts on the Eurosystem, I looked at how it operates and in The Eurosystem: Part 2 highlighted how capital flow across borders within the Euro Area has led to a large accumulation of TARGET2 balances by some NCBs such as the Deutsche Bundesbank. Bloomberg Businessweek had an article Germany’s Hidden Risk recently on this: [...]

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