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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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Wed, 08/17/2011 - 09:46 | 1568612 hugovanderbubble
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

Wed, 08/17/2011 - 09:52 | 1568676 spiral_eyes
Wed, 08/24/2011 - 15:07 | 1596210 hbjork1
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.

Wed, 08/17/2011 - 10:04 | 1568705 trav7777
trav7777's picture

icanhaz $500M at 1.1%?

Wed, 08/17/2011 - 11:53 | 1569046 Nobody special
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.

Wed, 08/17/2011 - 10:08 | 1568718 hugovanderbubble
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.

Wed, 08/17/2011 - 10:12 | 1568727 Fish Gone Bad
Fish Gone Bad's picture


Wed, 08/17/2011 - 11:43 | 1568993 Ahmeexnal
Ahmeexnal's picture

soc gen must hold on until the short ban ends

Wed, 08/17/2011 - 09:34 | 1568614 Irish66
Irish66's picture

Tender date today?

Wed, 08/17/2011 - 09:36 | 1568619 Paralympic Equity
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.

Wed, 08/17/2011 - 09:36 | 1568620 Global Hunter
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!


Wed, 08/17/2011 - 09:36 | 1568621 Everybodys All ...
Everybodys All American's picture

Is this Fed funded?

Wed, 08/17/2011 - 09:37 | 1568626 speconomist
speconomist's picture


Wed, 08/17/2011 - 09:41 | 1568636 whirlybird rules
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 :(

Wed, 08/17/2011 - 09:47 | 1568658 toady
toady's picture

The bernak is treasonous.

Wed, 08/17/2011 - 09:50 | 1568670 Chump
Chump's picture better say sorry for your rhetorical inflammation!  Tsk tsk, speaking that way about the CHAIRMAN OF THE FEDERAL RESERVE!!!

Wed, 08/17/2011 - 09:46 | 1568656 MFL8240
MFL8240's picture

Of course it is silly!

Wed, 08/17/2011 - 09:36 | 1568622 sabra1
sabra1's picture

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

Wed, 08/17/2011 - 09:37 | 1568625 speconomist
speconomist's picture

Time for another EURCHF short?

Wed, 08/17/2011 - 09:38 | 1568629 pendragon
pendragon's picture

eveyrything's fine. look at the euro

Wed, 08/17/2011 - 09:44 | 1568651 whirlybird rules
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... :(((

Wed, 08/17/2011 - 09:57 | 1568688 pendragon
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.

Wed, 08/17/2011 - 09:39 | 1568634 Translational Lift
Translational Lift's picture

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

Wed, 08/17/2011 - 09:47 | 1568635 Cleanclog
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.

Wed, 08/17/2011 - 09:58 | 1568689 DaBernank
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.

Wed, 08/17/2011 - 10:46 | 1568717 BurningFuld
BurningFuld's picture

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

Wed, 08/17/2011 - 11:01 | 1568836 vocational tainee
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..

Wed, 08/17/2011 - 10:17 | 1568735 hungarianboy
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 :-)

Wed, 08/17/2011 - 09:41 | 1568639 Smiddywesson
Smiddywesson's picture


illiquid croissant munching bitchez!

Wed, 08/17/2011 - 09:41 | 1568640 youngman
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..

Wed, 08/17/2011 - 09:42 | 1568644 doomandbloom
doomandbloom's picture

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

Wed, 08/17/2011 - 09:44 | 1568650 SheepDog-One
SheepDog-One's picture

Roubini....FED butt-boy.

Wed, 08/17/2011 - 09:48 | 1568662 doomandbloom
doomandbloom's picture

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

Wed, 08/17/2011 - 10:00 | 1568696 doomandbloom
doomandbloom's picture

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

Welcome to Fight Club guys..

Wed, 08/17/2011 - 10:00 | 1568697 DaBernank
DaBernank's picture

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

Wed, 08/17/2011 - 10:15 | 1568730 Village Smithy
Village Smithy's picture

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

Wed, 08/17/2011 - 10:28 | 1568761 vast-dom
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.




Wed, 08/17/2011 - 11:21 | 1568909 OpenEyes
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.

Wed, 08/17/2011 - 09:43 | 1568647 SheepDog-One
SheepDog-One's picture

Well hey bankers gotta eat too!

Wed, 08/17/2011 - 09:44 | 1568652 swissaustrian
swissaustrian's picture

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

Wed, 08/17/2011 - 09:46 | 1568655 SheepDog-One
SheepDog-One's picture

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

Wed, 08/17/2011 - 11:13 | 1568869 Manthong
Manthong's picture

Half a trillion?

Hardly enough for a Swiss Big Mac anymore.

Wed, 08/17/2011 - 09:45 | 1568653 disabledvet
disabledvet's picture

I'd laugh if it was Bank of America.

Wed, 08/17/2011 - 09:46 | 1568654 hungarianboy
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!

Wed, 08/17/2011 - 09:47 | 1568657 ZeroPower
ZeroPower's picture

Chart is in EUR, allotment in USD.

Wed, 08/17/2011 - 09:49 | 1568661 SheepDog-One
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.

Wed, 08/17/2011 - 09:58 | 1568693 toady
toady's picture


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

Wed, 08/17/2011 - 09:49 | 1568668 PulauHantu29
PulauHantu29's picture

$500 Million? Out of nowhere?

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

Wed, 08/17/2011 - 10:06 | 1568711 trav7777
trav7777's picture

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

Wed, 08/17/2011 - 17:58 | 1570667 cranky-old-geezer
cranky-old-geezer's picture

Yes, banks create currency out of thin air.  

It's a simple bookeeping entry. 

$500 million debit to notes receivable on the asset side.

$500 million credit to depositor account on the liability side.

And poof, $500 million has been created, just like that.

Wed, 08/17/2011 - 09:50 | 1568673 Hondo
Hondo's picture

So Gen????

Wed, 08/17/2011 - 09:52 | 1568677 Rainman
Rainman's picture

Money funds making a run for it.....the beginning of the end.

Wed, 08/17/2011 - 10:01 | 1568695 buzzsaw99
buzzsaw99's picture

Not Fidelity. Fidelity believes in those eurotard banks.

Wed, 08/17/2011 - 09:52 | 1568680 oogs66
oogs66's picture

what is shocking, is the market doesn't care!

Wed, 08/17/2011 - 09:55 | 1568687 Paralympic Equity
Paralympic Equity's picture

Because this doesn't make the MSM headlines, what you don't know can't hurt you policy.

But i am disturbed by the fact the the recent increase in emergency lending (overnight, short and long term) from the ECB doesn't seem to make a problem for the market retarded participants.

Wed, 08/17/2011 - 09:54 | 1568685 falak pema
falak pema's picture

That money was generated because the FED paid back a similar loan last night. Net balance to MS addition : zero. Official explanation to follow soon. Trust EU bureaucracy...they ALWAYS have an answer.

Wed, 08/17/2011 - 10:03 | 1568703 tony bonn
tony bonn's picture

i thought all the banks passed the stress tests, and since economic growth is robust how can there be any stress; hence any need tor capital infusions? oh well, you them banksters....

Wed, 08/17/2011 - 10:06 | 1568714 Cdad
Cdad's picture

Good point...although not ALL of them passed.

More banker games.  One of these days, folks are going to catch on to this crime wave.

Wed, 08/17/2011 - 10:19 | 1568734 SheepDog-One
SheepDog-One's picture

Its all good, DOW up another easy +100, based upon non passage of what was to rally the markets the 'Eurobond', and all they got to show for it was a lousy 'Transaction Tax' t-shirt. Party on Ben, although I have no idea how you make the case for any QE at all with the markets now within easy reach of recent highs, not to mention ALL TIME highs!

Yep, we're within 2,000 measely points (or 20 normal DOW +100 opening pops) from the all time record bubble market top, yet somehow we need far more ZERO% interest fuel for the top .001%?

Go ahead and make the case for it Ben, I cant wait to see this!

Wed, 08/17/2011 - 10:19 | 1568742 Cdad
Cdad's picture

There is no case for QE3, dog.  None.  And there will be no QE3.

Wed, 08/17/2011 - 10:25 | 1568753 SheepDog-One
SheepDog-One's picture

ES up 14? LOL! All clowns aboard! Last call for Stupidville, buy your ticket on margin, cant miss this REALLY it will be so cool and theres a free drink for the ride! Nevermind its spiked Cool-Aid, chug-a-lug.

Wed, 08/17/2011 - 11:16 | 1568879 Cdad
Cdad's picture

And of course, the criminal syndicate Wall Street scalpers have moved in to do their work.  This market is literally a travesty.  

We will never escape from this economic morass as long as this same herd of criminals is in control of the co located computers in the room next to where Duncan Niederauer takes his afternoon constitutional.

And speaking of Duncan...I see how well his brilliant merger is working out so well for shareholders.  From $42 to $27.  Pin a medal on him now that he has sold the historic floor of the NYSE to Germany and hosed everyone involved on the equity side.  

Surely, we need more bankers involved in creating value out of paper, hopium, arbitrage and unicorn dew.  That'll fix us!

Wed, 08/17/2011 - 10:15 | 1568731 Cdad
Cdad's picture

Banks running for free money in Europe?  Debt trouble on a monumental scale?  What do you do?

Well, if you are a producer at the BlowHorn [CNBC], play Christmas music in August and commence with...the shopping stories!


Attention COMCAST:  consider credibility training classes...or dumping your recent acquisition of NBC.  One or the other, it seems to me.

Wed, 08/17/2011 - 10:23 | 1568751 SheepDog-One
SheepDog-One's picture

LOL, the summer BBQ's havent even commenced yet, and the CNBC assclowns are running Christmas shopping stories? Gee first things first CNBC, maybe run some Halloween 'Big Candy' stories first? 

Personally, we're not doing ANY Christmas here at all, and I hope many others feel the same way. 

Wed, 08/17/2011 - 10:59 | 1568832 Cdad
Cdad's picture

My family gave up that nonsense a few years ago, too.  Any gifts given are usually things we've made.

F'n Christmas music in August on the BlowHorn.  Good grief...what a desperate lot.

Wed, 08/17/2011 - 10:19 | 1568740 monopoly
monopoly's picture

Agree, this is not important Tyler. You need to focus more on what really matters. Do we have the breakdown from Target on how much was spent on pencils, notepads and socks. I bet not. We gotta get it together all on what matters in this country.


Wed, 08/17/2011 - 10:20 | 1568744 dwdollar
dwdollar's picture

Don't panic!  The algos aren't predicting anything unusual in the market.

Wed, 08/17/2011 - 10:21 | 1568748 stormsailor
stormsailor's picture

/es up 13.50,  what a joke.   if you look at a 15 minute chart, the intervention in this market is very apparent

Wed, 08/17/2011 - 10:31 | 1568749 raki_d
raki_d's picture

Hope its not that same man again that pretended to be Hank Paulson now borrowing in the name of Soc Gen ..

Wed, 08/17/2011 - 10:42 | 1568787 speconomist
speconomist's picture

Good one!

Wed, 08/17/2011 - 11:57 | 1569070 Nobody special
Nobody special's picture

Dude, I totally hate your bug.  Don't change it.


Seriously... this would be the third time I've almost swatted my screen.  :P

Wed, 08/17/2011 - 10:27 | 1568758 shushup
shushup's picture

The market does not seem to be bothered by this as it has not been bothered by weak news lately either. But as usuall Zerohedge is days if not weeks ahead of everyone else.

Wed, 08/17/2011 - 10:43 | 1568789 speconomist
speconomist's picture

I know, seems that algos don't read headlines from here... yet.

Wed, 08/17/2011 - 10:27 | 1568759 RunningMan
RunningMan's picture

"Liquidity scramble" would be three or more banks borrowing. One bank is just...unfortunate.

Wed, 08/17/2011 - 10:32 | 1568769 PaperBear
PaperBear's picture

Are there a 2 and 5 year versions of this chart available ?

Wed, 08/17/2011 - 10:33 | 1568770 monopoly
monopoly's picture

Nice breakout on silver and our miners are showing some life for more than one day. Maybe, just maybe, it is time.....

Wed, 08/17/2011 - 10:35 | 1568775 koeleköpke
koeleköpke's picture

Could it be Dexia ?

Wed, 08/17/2011 - 10:39 | 1568778 orangedrinkandchips
orangedrinkandchips's picture

No problems here muther fuckers....all is good....problems....what problems? is what they are saying to the guilible.....ooooh kay

Wed, 08/17/2011 - 11:00 | 1568833 Sudden Debt
Sudden Debt's picture

500 million in a trillion dollar world...

Wed, 08/17/2011 - 11:52 | 1569044 oogs66
oogs66's picture

great post..extremely timely and useful....

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