Simone Foxman
Investor sentiment recently has been buoyed by signs that the European sovereign debt and banking crises appear to be under control—at least for now.
That's part of the fallout of liquidity measures led by the European Central Bank back in December, which allowed banks to access virtually unlimited financing from the central bank at incredibly low rates. This staved off the prospect of an imminent banking crisis in Europe—something we argued at the time was escalating even more quickly than worries about a PIIGS default.
With another three-year long term refinancing operation ahead, European banks will likely make big requests for more capital from the central bank, particularly since this is the last such operation the ECB is scheduled to conduct.
Investor sentiment recently has been buoyed by signs that the European sovereign debt and banking crises appear to be under control—at least for now.
That's part of the fallout of liquidity measures led by the European Central Bank back in December, which allowed banks to access virtually unlimited financing from the central bank at incredibly low rates. This staved off the prospect of an imminent banking crisis in Europe—something we argued at the time was escalating even more quickly than worries about a PIIGS default.
With another three-year long term refinancing operation ahead, European banks will likely make big requests for more capital from the central bank, particularly since this is the last such operation the ECB is scheduled to conduct.
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