Economy
In reply to the discussion: STOCK MARKET WATCH, Wednesday, December 14, 2011 [View all]Ghost Dog
(16,881 posts)17.19 Strong demand for safe havens saw banks' dollar borrowing triple today at the ECB's weekly loan offering. A total of 12 banks used the ECB's seven-day dollar swap line, borrowing $5.122 billion - three times the $1.602 billion borrowed last week.
The surge came two weeks after central banks slashed the cost of accessing the swap line and as the cost of raising dollars from the market rose, making funding via the ECB more attractive. Laurence Mutkin, strategist at Morgan Stanley, said:
Quote Until year-end there's an aversion generally to expanding balance sheets so this is exactly the kind of time you would expect market pricing to be unattractive relative to these official tenders.
Dependence on the ECB as a source of dollars has grown as the debt crisis raging in the eurozone has pushed US money market funds to cut back their lending into the currency bloc, spurring the ECB to step up its support for banks.
/... http://www.telegraph.co.uk/finance/debt-crisis-live/8954974/Debt-crisis-live.html