The Dash for Cash; Bank Funding  

Oleh:

[s.n]

Jenis: Article from Bulletin/Magazine
Dalam koleksi: The Economist (http://search.proquest.com/) vol. 401 no. 8762 (Dec. 2011), page 79-80.
Topik: Default; Bond Markets; Regulation of Financial Institutions; Funding; Investors; Banking Industry

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Perpustakaan Pusat (Semanggi) Nomor Panggil: EE29.69 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Usually it is banks that put customers under a microscope before lending them a penny. But in Europe banks are the ones now facing scrutiny before investors, companies and savers will lend them any cash. Faced with an investor strike, banks are putting a halt to new loans and selling or pawning all they can. Unless the investor strike lifts soon, Europe risks a credit crunch. At worst, there may even be bank runs and failures. In one sense, a slow bank run is already taking place in the market for bank bonds, which in happier times provide the long-term and stable funding that allows bank regulators to sleep peacefully at night. Since July these markets have frozen up almost completely for European banks. Bond issuance has plunged (see chart on next page) and has shifted towards secured bonds, which are backed by assets that investors can grab if the bank defaults. The run on European bank-funding markets in some respects mirrors the one taking place in some government-bond markets. This is to be expected given the links between banks and governments.

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