ECB liquidity injections not working - by Leigh Phillips
The billions of euros the European Central Bank has been injecting into money markets since the start of the crisis in an attempt to get banks to start loaning money to each other and other businesses is not working.Instead, banks are redepositing some of the monies back with the ECB itself - over €100 billion overnight as of Tuesday (30 September - the latest available figures) - as they are worried that the central bank is the last safe place left to stash their cash.
As of last Tuesday (23 September), banks had "parked" €1.4 billion with the ECB's "deposit facility." By Thursday, the figure had climbed to €4.2 billion and jumping to €28 billion the next day. On Monday, banks were now depositing €44 billion with the ECB and as of yesterday, the latest figures available, the cash placed with the bank for safekeeping had more than doubled to €102.8 billion.
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