Behind The Scenes Liquidity Scramble In Europe? One Bank Borrows $500MM In Emergency Cash From ECB

Tyler Durden's picture

So the conventional herd wisdom is that following last week's near implosion, Europe is now suddenly supposed to be fixed? Perhaps. Perhaps not. According to the just released results of the ECB's tender operation for emergency 7 day liquidity, arguably the closest the ECB has to a dollar denominated discount window (and the associated stigmata upon borrowing), just one bank borrowed $500 million in a 7 day liquidity providing operation at a 1.1% rate. Why is this notable? Because as the chart below indicates, there had been no borrowing under this facility since March 2011, and the last time there was a sizable borrowing under the 7 Day OT was back in May 2010, when Europe was blowing up for the first time and the ECB was scrambling like a headless chicken to contain the contagion fires. So the question now is which (French? Italian?) bank is still caught with its pants down and is crawling to the ECB for what is a quite sizable $-based capital injection (this same bank is certainly using the ECB's various other liquidity providing lines of credit).

Today's tender result:

And a historical chart:

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hugovanderbubble's picture

Societe Generale ----remember those losses in derivatives books close to 200.000 Mn.Euros....

Au revoir Socgen

Credit Agricole


Intesa San Paolo

hbjork1's picture

Thanks for the link. 

Too bad Paul didn't have more time.  The Bernak classified gold as an asset but if it can be classified as a fungable asset then it is a money using formal definitions of money.

Nobody special's picture

Is the 1.1% interest rate based on a 7 day borrowing term as it appears?  If so, 1.1% @ 7 days = an annual compounded rate of 78.5% interest.  That's not exactly a faith inducing rate.

hugovanderbubble's picture

Remember that...

Asian banks has cut credit line facilities to SOC GEN LAST WEEK...


So my bet is SOCIETE GENERALE IS CLOSE TO DEFAULT and will be sold off into pieces.

Irish66's picture

Tender date today?

Paralympic Equity's picture

That must be the same bank that borrowed 4 billion EUR overnight some days ago, and the 1 billion EUR yesterday.

Global Hunter's picture

Extra post points for using the word stigmata in an article.  Bring on Stigmata!!! For all those who like a little early 90s shoegazing muzak!


whirlybird rules's picture

probably...  keep shorting dollars vs euro... makes no sense, but the trade makes money.    remember, Ben has the American people's interest front and center...  ahahahahahaha...   wild times :(

Chump's picture better say sorry for your rhetorical inflammation!  Tsk tsk, speaking that way about the CHAIRMAN OF THE FEDERAL RESERVE!!!

sabra1's picture

i'm going with Reggie's call that it's a french bank!

speconomist's picture

Time for another EURCHF short?

pendragon's picture

eveyrything's fine. look at the euro

whirlybird rules's picture

..  the SMP has been good for at least another $5B since the important Merk/Sark announcement since yesterday, $3B of that was for the opening bell of the European bourses.  when you think of the alternative, this is cheap!!! at least until it stops working... :(((

pendragon's picture

it's a low bar for using the smp. last week it was to prevent meltdown. this week trichet just fancied it.

Translational Lift's picture

More to come I would imagine........

Cleanclog's picture

Could be an Austrian bank.  They are very exposed to imploding Hungarian housing where mortgages are denominated in Swiss Francs, not Euros, so you can imagine the havoc that wreaks on balance sheets.  Unless, like our banks, they don't really need to mark to market.

DaBernank's picture

I vote that it is my bank, Bank Austria, which is actually Unicredit. Massive numbers of mortgages in CHF here in Vienna and in Hungary.

BurningFuld's picture

People in Austria borrowed in Swiss Francs? Excuse my ignorance but why?

vocational tainee's picture

It was very popular in austria and other countries like hungary, to buy swii mortgage loans at inter banking rate (1,5 % )plus premium (0,5%)for the lokal austian bank.In times of financial peace ,quite cheap and intresting.But now ,with the swissie going up 37% financial suicide..

hungarianboy's picture

huh? We can get sign a new contract and you just have to pay 180 fixed for the coming three years.

ok maybe some interest rate and what ever after the three years but again as usual, kicking the can down the road. Seems like the Hungarian PM learnt good from other countries :-)

Smiddywesson's picture


illiquid croissant munching bitchez!

youngman's picture

Keep on this stat...this will show the future...I would be taking my money out of the banks too....actually did....years ago...its just a place for a credit card for me..

doomandbloom's picture

Twitter fight between Roubini and Tyler....biff, pow!

doomandbloom's picture

Roubini is going all out now...i think he might cry soon

doomandbloom's picture

Max Keiser joining in now...this is good...

Welcome to Fight Club guys..

DaBernank's picture

I had to unfollow @nouriel on twitter, couldn't stand the full retard shit he was spewing.

Village Smithy's picture

Maybe someone has stolen his iphone and is impersonating him. Nice undergrad prank.

vast-dom's picture

very interesting twitter scuffle. why? bc no one can hide behind static acedemic papers and corporate reports in real-time exchange which allows for facts, charts and tweets.




OpenEyes's picture

I finally unsubscribed to his newsletter.  He seemed to be on the right track around 2008 but somebody seems to have bought him off in the meantime.

SheepDog-One's picture

Well hey bankers gotta eat too!

swissaustrian's picture

500 Million isn´t a big deal though...

SheepDog-One's picture

Nah! Chump change, just banker walkin-around money. Banker gotta get his croissant on.

Manthong's picture

Half a trillion?

Hardly enough for a Swiss Big Mac anymore.

disabledvet's picture

I'd laugh if it was Bank of America.

hungarianboy's picture

Maybe they took more than needed to kick the can further down the road for the rest of the year. Maybe that's the reason for the uber huge amount? Is this possible? If so then rally on!

ZeroPower's picture

Chart is in EUR, allotment in USD.

SheepDog-One's picture

New ZIRP world order.....banks just get handed as much interest free cash as they want.

Well hey as long as .01% of the worlds people are doing better than ever, thats all that really matters.

toady's picture


Maybe your population numbers were off in the calculation...

PulauHantu29's picture

$500 Million? Out of nowhere?

Doesn't that mean the ECB (or the Fed) just printed that money?

trav7777's picture

no, they lent it.  But, no, it didn't exist prior to its conjuring via magic