UPDATE: ECB Monitoring Money Market Conditions Very Closely
[转贴 2008-09-15 16:10:19]
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The European Central Bank is closely monitoring money market conditions for signs of turmoil, following news that more U.S. banks are toppling after over a year of financial market tensions following the collapse of the U.S. subprime mortgage market.
"The ECB continues to closely monitor the conditions in the euro area money market," the ECB said. "The ECB stands ready to contribute to orderly conditions in the euro money market," it added.
In the past, such remarks by the ECB have signaled that it is preparing to conduct a quick tender to add liquidity overnight to markets. The latest reserve period began on Sept. 10, which would give the ECB some leeway to inject extra liquidity to markets.
"With credit markets clearly under stress, the ECB's first response will be to add liquidity to the system through its repo operations, analysts at the Royal Bank of Scotland said in a note to clients, adding that this is likely to happen soon.
The action also "raises the possibility of the ECB participating in coordinated rate cuts, if they were to take place," RBS added.
Overnight it emerged that Lehman Brothers Holdings Inc. (LEH) intends to file for bankruptcy protection, while Bank of America Corp. (BAC) has said it will buy Merrill Lynch & Co. (MER) for $50 billion in an all-stock transaction.
Separately, the Deutsche Bundesbank also issued a statement Monday to say the German Finance Ministry, banking regulator BaFin, and the Bundesbank are in close contact with their international partners and German credit institutions.
"They are watching further developments on the national and international financial markets very closely," the Bundesbank said in a statement.
Furthermore, the exposure of German credit institutions to Lehman Brothers Holding (LEH) is "within an overseeable framework and can be managed," the statement added.
Deutsche Bank (DB) and Commerzbank (CBK.XE) had no comment on the move by Lehman Brothers to file for Chapter 11.
Interbank euro money market rates are edging higher.
At the onset to tensions a year ago, European banks became concerned about the liquidity of their interbank counterparts, leading to sharply higher interbank money market rates. Interbank rates are the rates banks use to borrow from one another.
Overnight rates have surged to 4.47%, above the 4.30% open and Friday's intraday high, but still below the 2008-high of 4.67%.
Rates are "slightly higher," one money market trader said, adding that he expects the ECB will act to prevent any dramatic swings to rates.
In contrast to the overnight rate, three-month rates are at 4.92%, unchanged from early trade and below the intraday high of 4.95%.
"The ECB continues to closely monitor the conditions in the euro area money market," the ECB said. "The ECB stands ready to contribute to orderly conditions in the euro money market," it added.
In the past, such remarks by the ECB have signaled that it is preparing to conduct a quick tender to add liquidity overnight to markets. The latest reserve period began on Sept. 10, which would give the ECB some leeway to inject extra liquidity to markets.
"With credit markets clearly under stress, the ECB's first response will be to add liquidity to the system through its repo operations, analysts at the Royal Bank of Scotland said in a note to clients, adding that this is likely to happen soon.
The action also "raises the possibility of the ECB participating in coordinated rate cuts, if they were to take place," RBS added.
Overnight it emerged that Lehman Brothers Holdings Inc. (LEH) intends to file for bankruptcy protection, while Bank of America Corp. (BAC) has said it will buy Merrill Lynch & Co. (MER) for $50 billion in an all-stock transaction.
Separately, the Deutsche Bundesbank also issued a statement Monday to say the German Finance Ministry, banking regulator BaFin, and the Bundesbank are in close contact with their international partners and German credit institutions.
"They are watching further developments on the national and international financial markets very closely," the Bundesbank said in a statement.
Furthermore, the exposure of German credit institutions to Lehman Brothers Holding (LEH) is "within an overseeable framework and can be managed," the statement added.
Deutsche Bank (DB) and Commerzbank (CBK.XE) had no comment on the move by Lehman Brothers to file for Chapter 11.
Interbank euro money market rates are edging higher.
At the onset to tensions a year ago, European banks became concerned about the liquidity of their interbank counterparts, leading to sharply higher interbank money market rates. Interbank rates are the rates banks use to borrow from one another.
Overnight rates have surged to 4.47%, above the 4.30% open and Friday's intraday high, but still below the 2008-high of 4.67%.
Rates are "slightly higher," one money market trader said, adding that he expects the ECB will act to prevent any dramatic swings to rates.
In contrast to the overnight rate, three-month rates are at 4.92%, unchanged from early trade and below the intraday high of 4.95%.
标签: forex 
分类: forex
