Ares
18th August 2010, 06:25 AM
As ECB Overnight Borrowing Rises To Three Month High
After last week 2 European banks announced they are using $430 million in a Liquidity Providing 7 Day USD operation, better known as suckling on the Fed's FX swap line, today's the ECB confirmed that one bank had bid on the facility, effectively withdrawing $35 million. The operation came at a rate of 1.19%, higher than last week's 1.18%. It is unclear if the lone bidder is one of the two banks that used the swap facility in the prior week. All this confirms is that the liquidity situation among European banks is certainly not getting better, as financial institutions continue to be squeezed for both dollars and euros, even as the 3 Month Euribor spot had receded slightly in the past week, in direct correlation with the EURUSD fixing.
<img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/hildebrand/USD%20FX%20Swap%208.18.jpg"/>
And confirming that the European liquidity situation has not ended its deteriorating spiral, the ECB announed that borrowings on its Overnight Marginal Lending Facility reached 3 Month highs, at €1,861 billion, the highest since the €4 billion borrowed on May 12, when Europe was crashing and burning.
<img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/hildebrand/ECB%20Overnight%20Lending%208.18.jpg"/>
http://www.zerohedge.com/article/one-european-bank-uses-fed-fx-swap-line-current-week
After last week 2 European banks announced they are using $430 million in a Liquidity Providing 7 Day USD operation, better known as suckling on the Fed's FX swap line, today's the ECB confirmed that one bank had bid on the facility, effectively withdrawing $35 million. The operation came at a rate of 1.19%, higher than last week's 1.18%. It is unclear if the lone bidder is one of the two banks that used the swap facility in the prior week. All this confirms is that the liquidity situation among European banks is certainly not getting better, as financial institutions continue to be squeezed for both dollars and euros, even as the 3 Month Euribor spot had receded slightly in the past week, in direct correlation with the EURUSD fixing.
<img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/hildebrand/USD%20FX%20Swap%208.18.jpg"/>
And confirming that the European liquidity situation has not ended its deteriorating spiral, the ECB announed that borrowings on its Overnight Marginal Lending Facility reached 3 Month highs, at €1,861 billion, the highest since the €4 billion borrowed on May 12, when Europe was crashing and burning.
<img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/hildebrand/ECB%20Overnight%20Lending%208.18.jpg"/>
http://www.zerohedge.com/article/one-european-bank-uses-fed-fx-swap-line-current-week