ECB: Too easy for too long
Javier Arce | The ECB does not get the banks to move their money, interbank market is still broken and eurozone lenders are accumulating the ECB’s liquidity injections (almost 700bn) at the central bank itself.
interbank market
The Gradual Normalisation Of The Interbank Market
According to figures from the latest quarterly report of the Bank for International Settlements (BIS), there is a gradual normalisation happening in the interbank market.
The Connection Between The TED Spread And Liquidity Risks
The TED spread is an indicator of liquidity risks in the interbank market. It is the difference between the 3-month interest rate on interbank loans and the yield on 3-month US Treasury Bills. Any rise in the indicator would lead the banks to ask for more Treasuries and be more reticent about granting loans.