Did A Large European Bank Almost Fail Last Night?

Tyler Durden's picture

Need a reason to explain the massive central bank intervention from China, to Japan, Switzerland, the ECB, England and all the way to the US? Forbes may have one explanation: "It appears that a big European bank got close to failure last night.  European banks, especially French banks, rely heavily on funding in the wholesale money markets.  It appears that a major bank was having difficulty funding its immediate liquidity needs. The cavalry was called in and has come to the successful rescue." Granted the post is rather weak on factual backing and is mostly  speculative, but it would certainly make sense. That said, it harkens back to our original question: just how bad was the situation if the global central banking cabal had to intervene all over again, and just what was not being told to the general public? Lastly, and most important, slapping liquidity bandaids on solvency gangrenes does nothing but buy a few days at most. Furthermore, we now expect the stigmata associated with borrowing from the Fed to haunt each and every European bank as vigilantes will now use the weekly ECB update on borrowings from the Fed as a signal to hone in on this and that weak Italian and French, pardon, European bank.

More from Forbes:

These are the type of actions that were being taken during the financial crisis in 2008.  Now most knowledgeable experts agree that not rescuing Lehman Brothers was a mistake.  The authorities are not about to make the same mistake again.  The only explanation for the massive action is that central banks were concerned about a pending failure that is not publically known.  The readers may want to make their own judgment from the following excerpts from a statement by the Federal Reserve.


These central banks have agreed to lower the pricing on the existing temporary U.S. dollar liquidity swap arrangements by 50 basis points so that the new rate will be the U.S. dollar overnight index swap (OIS) rate plus 50 basis points. This pricing will be applied to all operations conducted from December 5, 2011. The authorization of these swap arrangements has been extended to February 1, 2013. In addition, the Bank of England, the Bank of Japan, the European Central Bank, and the Swiss National Bank will continue to offer three-month tenders until further notice.

h/t Maurice Pomery

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Josh Randall's picture

Wait until a big US bank almost fails EVERY NIGHT

UGrev's picture

The frequency in which bank failures "Almost Happen" is increasing dramatically. The ability to "save" them (if you call re-animation 'saving') is diminished just as quick. 

The charade cannot continue without total collapse of the global economy. The great reset cometh!

I have to go count my cans of beans now.. 

DormRoom's picture

As Tyler says, you can't solve a solvency issue with more liquidity.


The casino is still open. sit at the tables, if you want.  But once the financepocalypse occurs, and people whom were virtuous, and didn't overconsume, or overspend, discover their life savings has been wiped out by either hyperinflation, or an equities collapse, will rage.


I'm even considering getting more credit,  maxing out my credit cards, buying physical gold with the extra credit, and declaring bankruptcy to fcuk over the banks.


Governments will bail out the banks, so why be responsible about saving.





Mr Lennon Hendrix's picture

Did we skip the IMF funding phase or is that coming next?

If $400 billion monthly Tresurie auctions weren't already enough, and the possibility of an IMF (read US) bailout of Europe was not enough, now we have more cordinated action from Central Banks to increase liquidity (read decrease the value of fiat) to stabolize (read increase prices) so that everyone can trade their NKE shares for Nike shoes, go on their honeymoons with their dollars to Marriot in Maui, pay their bills with food stamps, and on and on.

This current way of business, at the monetary level, is not only an insuficient way of means, it is insane.  If our problem is that we need more liquidity, we must look back and see what caused the crunch.  It was easy access to debt/fiat.  It made people complacent in understanding true value; true value of goods and time.

Now our measures extend this time frame, but like a cup, our liquidity runneth over.  The policy makers will ask for a bigger straw, but this will just make the piggies fatter.  Soon the piggies will die of heart failure, and once they do, the humanity will wake up realizing that the wealth of the system was drained like the blood of a goat at the alter of the Federal Reserve.

The time is nigh for the crisis to explode.  The deflationary system many are waiting for already happened in '08.  Just because it didn't last the year doesn't mean it wasn't there.  Asset prices collapsed, and time is not a figure in monetary policy, only price.  Once price was "stabolized" the game was over.  The time is nigh for what we don't have a name for- it could be a hyperinflationary event, it could be a great rise in real goods (ie PM/oil) while the cities sleep with suger plum dreams.  It could be anything, so be ready for it.

Whalley World's picture

you mean Zombie bank runz, don't you?

trav7777's picture

banks can't fail...they will just borrow what they need, even from themselves.

If they don't have that kind of juice, just borrow it from their clients' sequestered accounts

He_Who Carried The Sun's picture

Look at the revised ratings from this week and you have the answer, a truly globally operating bank, heavily underwater: Banco Santander!

Oh regional Indian's picture

Liquidity runneth over. Like the cup indeed LH. And handle too, while you are at it.

It really does look like the Club of Rome Global Systemic Function is either lacking enough real time data or is overloaded.

Snap, crackle, pop...etc...



old naughty's picture

I was pondering if I should ask which bank it was. But if the CofR is lacking data, heck, I shouldn't ask, right?

N-ever mind...consciousness keeps perma record. Some know.

terryfuckwit's picture

barclays did a really weird very brief downward spike bout 1pm huge drop down can still see on the graph if you look

DoChenRollingBearing's picture

@ DormRoom: that is the Chumbawamba approach to getting rich!

Mr Lennon Hendrix's picture

Do you like how Sprott went deep into silver right before the cordinated Bank funding move?  Dude is fucking savvy.

ucsbcanuck's picture

Not surprised that the Kiwi saw it for what it was.

Jay Gould Esq.'s picture

"...just how bad was the situation if the global central banking cabal had to intervene all over againand just what was not being told..."

Rest assured, one of the current dramatis personae in this long-running Euro tragedy -- Frau Merkel, Monsieur Sarkozy, or more likely, Il Cavaliere -- will pen a memoir several years from now, and we will know the answer.

Not that A), There will be any hard currency to purchase said memoir with or, B) Anyone will care in the first place; the dip having been bought, the bonuses long since paid, cashed, and spent.

The Big Ching-aso's picture


I wonder which rank bank was ranked worse than the other ranked banks that rank.

hack3434's picture

BAC has $84B in bonds maturing next year. I would say BAC IS already there... 

camaro68ss's picture

$84B is nothing these days. the bernake can print that in a few hours no sweet.

Mr Lennon Hendrix's picture

How about European banks and US banks take turns failing, because if the US and Europe collapse on the same day FX traders will collapse the currentsea market.

Tsunami, bitchez!

asteroids's picture

Too much credit, too much debt. No cash and a CDS bomb waiting to implode. Something very very bad is about to happen.

xcehn's picture

This is as LOUD as it gets as a wakeup call.  You can either hear it as TPTB have everything under control and it will all be fine OR TPTB are so pathetically desperate that this is really the last clear chance before the SHTF.  I am reading this as a loud SOS and preparing for the obvious implications.

Buck Johnson's picture

It sure did, and they are being extremely quiet about it also.  The don't do something like this unless a major bank is about ot go under.

HoofHearted's picture

Societe General? BNP? Who you got in the Dead Pool? My fiat is on SocGen.

hedgeless_horseman's picture



My guess is a German bank (DB?).  Maybe a warning shot for the krauts to get their prole's votes in order.


Mactheknife's picture

Watch the EUR/USD today. If today's move were for real it would be at 1.36. If this drops below 1.3440...short the shit out of this move.  There just isn't enough juice behind this move.

machineh's picture

Only Reggie Middleton knows for sure.

And he ain't talkin' until the nationalization is announced.

Meanwhile, the covert deposit runs continue ...

GeneMarchbanks's picture

... and have probably spread to the UK. Lloyds & HSBC ain't in Sigma X top ten for nothin'.

79's picture

Reggie is amazing. Only the other day I saw him stroll past my front door and shit a ton of skittles on my lawn.

Ancona's picture

So, what's the half life of this one? Three.....maybe four days?

CPL's picture

Eight central banks all printing in harmony to cover the unfunded liabilities that they've spent out of pensions?


The rest of our lives.

Clorox Cowboy's picture

Don't even need to read the article...the answer is almost certainly "Yes".

Clorox Cowboy's picture

Really...I get a junk for assuming that some bank in Europe is close to failure???  Is that you, Draghi?

GeneMarchbanks's picture

BNP, DB, SocGen take your pick.

hugovanderbubble's picture


Erste Bank

Credit Agricole

Banco Popular

MontePaschi Siena


hugovanderbubble's picture

BNP+FORTIS ten times worst than multitimes  nationalized DEXIA


KBC is the next one in belgium free falling


In Germany the big problem are the Landesbanks balance sheets....

Carlyle Groupie's picture

The obvious failure was at the central banks.

Add another floor to the house of cards.

Desert Irish's picture

West LB - currently still losing billions in their world-wide resort venture SNAFU. !9 major investments - 18 of them either went into recievership or were eventually sold for pennies. Writedowns still looming as the majority are still under recievership. The most recent was the JW Marriot Resort in Muskoka where they took a $105 million write-off in September. $80 million in hard costs with another $25 million in recievership fees - times that by 18.

GeneMarchbanks's picture

All that aside, this is still a massive can kicking exercise. Just keep putting out fires with flamethrowers you cockgobblers.