Mf global creditors still waiting for funds for debt payment of $2 billion, and China, which has the world’s biggest stock market but a big domestic currency problem, waiting바카라 for foreign debt to be repaid with interest.
One senior European executive said that the eurozone’s worst crisis since World War II was not the collapse of Lehman Brothers, but financial contagion.
The world’s worst-performing financial firms saw their stock prices hit records in October, the third straight month where they have hit rjarvees.comecord highs after a sharp selloff in US stocks this summer and as they have raised hopes of new money in Europe as markets prepare for a Greek election next month.
But Mr Draghi’s decision to cut interest rates in the euro zone’s second-biggest economy had the unintended effect of making it much more difficult for banks and other financial institutions in the bloc to raise fresh capital to stay afloat and absorb risks.
There was no quick resolution to the crisis, but investors’ panic-fueled selling meant that a European currency fund had to provide a fresh $6bn of funding for banks to meet a $8.4bn loan gap.
That has reduced the European Central Bank’s reserves by $4bn and its overnight lending costs were also cut dramatically, giving the bloc’s largest banks a lifeline, according to analysts at Credit Suisse, UBS and Moody’s.
The crisis also exposed a flaw in the way the EU’s bailout funds had been structured. The euro’s entire capital-raising programme, from €70bn on June 25 this year to more than €100bn on September 30 this year, had been structured as a three-stage process for banks.
With the first step, banks were required to issue loans, with the proceeds earmarked for further capital injection. But after the second part of the programme began with capital-raising on July 31, the funding came out of the coffers of the third step, which required financial institutions to raise capital from a wider pool.
The European central bank had initially expected the third stage to begin after the second stage. It said such a timing was unrealistic for such an investment program because banks in other central bank bond-buying countries had already completed their initial phase of capital-raising and were in a much better position to meet their capital obligations a바카라fter the second stage.
On Friday, the bank said it had extended all of its assistance to euro-zone banks, adding in a statement that the bank was ready to provide another $40bn if the European Centra