dinsdag 30 september 2014

European Bank Deposits Once Again Declining

As everyone already knows, the LTRO from the ECB this September was a complete failure.

So that means liquidity for the European banks has not improved a lot. They expected that European banks would take credit from the ECB of €385 billion, but instead it became €82.6 billion across 255 counterparties. Excess liquidity has jumped up a bit from €77 billion to €122 billion, but it's still not enough to be safe in my opinion. I wrote about that here.

This is also being confirmed in the deposits at the European banks. The latest number from August 2014 showed a decline in deposits.

And so excess liquidity keeps drying up. Let's wait till the second LTRO in December and see how that goes. They can't wait any longer as Europe is now entering a deflationary cycle, probably along with a lot of unemployment claims.

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