by Tracy Alloway
Financial Times
April 5, 2011
Ireland has made an unwelcome name for itself as a country where a state and financial system have become most uncomfortably entwined — the sovereign-bank loop on steroids, if you will.
Just think of that Emergency Liquidity Assistance (ELA) which sees the Irish central bank accepting far dodgier collateral in return for loans to banks than the European Central Bank’s own-brand of repos. Or the Eligible Liabilities Guarantee (ELG) scheme — in which the Irish state guarantees certain bank deposits plus new bank debt securities issued with a maturity of up to five years. Or Irish banks issuing Ireland-guaranteed (i.e. ELG) bonds to themselves to use as collateral at the ECB’s facilities.
But did you know, Greece has been doing the exact same thing for many months?
More
See the J.P. Morgan Report
No comments:
Post a Comment