Banks today grabbed €530 billion at the ECB's second offering of cheap three-year funds, fuelling expectations that credit will flow to businesses and borrowing costs will ease for governments hit by the euro zone crisis. This is what Reuters tells us, adding that, in the space of two months, the ECB has now injected more than a trillion euros into the financial system, banishing the threat of a credit crunch.

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In the mean time Greek bank deposits are taking a hike
http://www.zerohedge.com/news/greek-ban ... rgest-ever

staving off the threat of bank failures

Closer to the truth, methinks.

So when banks borrow 530 million euros they don't have new CEOs appointed by the ECB and they don't have to introduce austerity measures such as pay and pensions cuts like Greece had to. Am I wrong to think that this is unfair? After all, the banks created the exotic financial instruments that created the money that the Greek government and others borrowed.

They really should build a golden statue of Draghi outside Brussels HQ,The Man That Saved the Euro......we can melt it down later.


The architects of the eurozone deserve a footnote here too,for making it impossible to leave,even in a crisis, which I believe they were well aware of at the time.

No, I think the central banks (under government orders) created the money and gave it to the retail banks who THEN created the exotic financial instruments as a way to launder that money via poor saps like us at a very handsome profit. No wonder they're all getting lovely big bonuses. The retail banks did not create the crisis nor the market, they simply exploited stupidity and greed in the corridors of 'power'.

I think it was the investment banks (the likes of GS), or the investment banking arms of the big banks, who created derivatives. The retail banks/arms should only have been using them for defensive hedging.


Once they've played the "regulatory capture" game - and the shadow banking system in particular has escaped proper supervision - then they are culpable.

Private banks do actually create 97% of our money in use,something I never realised,which is electronic "account money" they create at the flick of a mouse,via loans,most of it mortgages.That is how money is created.Sure, they have to keep reserves at the central bank,but this is not spending money,the leverage on this "reserve" by private banks is where the system breaks down.

There are so many quotes,facts and opinions floating about it is hard to see the wood for the trees, but I always look in detail at what Mervyn King has to say,he often is quite understated but he will point one in the right direction.His view on this new LTRO from the Reuters link Richard gives is




So he sees the whole project as totally missing the point and thus unhelpful(unless you are a big bank/business or government)and they are about to create a whole new set of problems further down the line....understated as usual, but that ll do for me.

Were it not clear enough before, we should all be convinced today that the Colleagues would rather bring down the World's financial markets...now or later is of no consequence....in order to save an unmanageable faux currency. In plainspeak, printing money on a scale undreamed of in Zimbabwe...or,let it be well remembered, Weimar. We know where that got us.

Bernanke: ECB well capitalized
http://www.zerohedge.com/news/ben-berna ... apitalized

No wonder stock markets go negative when this guy opens his trap.

S&P downgrades anyone?

Your Betters understand that their Mere Citizens will not lift a hand against them, out of fear of their Praetorian Guard. When THAT changes...

Vincent, I don't seem to be able to publish an answer to your previous point so I'll make it separately.

You are of course describing fractional reserve banking BUT it is still the central banks that determine the size of this fraction and therefore how much new money is created by the next stop in the banking system (I.e. banks in the retail and wholesale markets). Not forgetting of course that generally speaking central banks are themselves "private" banks.

The rental and wholesale banking system may indeed have created 97% of the money in the economy but how else (prior to QE/asset purchase) would the central banks create more money?