That "One" European Bank Continues To Rely Exclusively On Fed Generosity For Dollar Funding
Earlier the ECB released its weekly USD tender operation details, i.e., the Fed swap line roll, and it appears that the same European bank that has been locked out of money markets for several weeks now continues to have dollar funding issues. The same bank that was the sole bidder for $60MM in dollar liquidity last week, and the week prior, has once again obtained dollar funding via the ECB at the fixed rate of 1.18%, which continues to be roughly 4 times richer than comparable USD Libor based rates. Why this bank is locked out of the interbank market? Why is nobody else curious about why a seemingly solvent Europe continues to need the Fed's swap lines? It doesn't matter: by 2019 the bank should be ok. After all it will have 30x leverage for at least 3 years to get its book in order. Perhaps they can also hire Dick Fuld as executive chairman and head consultant on how to generate the best IRR on ludicrous leverage levels.