European banks, increasingly concerned about their ability to access funding, are devising complex and potentially risky new deals that enable them to continue borrowing from the European Central Bank.
The banks’ moves, which include behind-the-scenes swapping of assets among financial institutions, could heighten risk across Europe’s already fragile financial system, say some senior industry officials and regulators.
They also are a sign that struggling banks across Europe are preparing for a period of prolonged reliance on financial lifelines from the ECB. The Continent’s intensifying financial crisis has made it difficult for many banks to obtain funding from customary market sources.
“The banks’ moves, which include behind-the-scenes swapping of assets among financial institutions, could heighten risk across Europe’s already fragile financial system, say some senior industry officials and regulators.”
Will this involve financiers/banks using the huge world stockpile of “derivatives” which are actually ‘things that are not things’ in an attempt to stabilize their situations?
If so, then what we are looking at are rescue efforts based upon ‘shifting sands’ and ‘pipe dreams.’