Central banks scrambling for cash

Scramble for cash as central banks dry up

British banks soon could be scrambling for short-term funding once more amid reports that supplies from Threadneedle Street and from Frankfurt may be drying up.

The Bank of England explicitly ruled out extending its Special Liquidity Scheme (SLS), while the European Central Bank is reportedly considering tightening its lending criteria.

The two central banks have been huge suppliers of liquidity to British banks. The SLS is thought to have provided £50 billion or more, while the ECB has lent banks €467 billion (£378 billion) - much of it thought to have gone to UK institutions.


Here is yet another indication that Europe is both in the clutches of a major crisis and is dealing with it more openly than the US.

I find it odd that the US was the major developer and purveyor of the toxic debt that now infects the world banking system, yet the US still enjoys broad support from Europe’s central banks, which have been helping to prop the dollar and bail out their own banks. I suspect that if the tables were turned, the US would simply mail back the bad debt and make the other party pay up. But that’s just a guess.

This is a companion discussion topic for the original entry at https://peakprosperity.com/central-banks-scrambling-for-cash-2/