Not that they between excess of lightness

The purpose of difficult months will now be the lot of the banks. Now, the crises of liquidity will be recurring and structural. And it is not some bond of long term that the banks have launched in recent weeks to to refinance that will change any longitudinal If the banks are victims of this situation, they are also for part originally. Not that they between excess of lightness. But vigilance too. However caution leads to a scarcity of resources.

In the wake of the Greek tensions of the month of may, the only reluctance of banks to lend between them in the short term has caused a new liquidity air hole. Almost as hard as in 2008, after the fall of Lehman Brothers. This market inter-bank as well as debt issued by banks to collectives and treasuries of the companies feed less than 10 of their need to refinance (the remaining 90 come from long, type financing bond issues). It is on paper, but in fact, the amounts involved to trillions of euros. Is it to say that they are also poor managers of their resources before the crisis The truth is more nuanced.

Since the U.S. "subprime" earthquake, banks have adopted their liquidity management more frileuse and virtuous. They have stopped, for example, to adjust their needs of cash by systematically transferring assets, common practice for market operations. The crisis, making it impossible to evaluation at the market price of certain titles, their de facto has shown the difficulty of the exercise. It forced them to put an end to their policy for the management of liquidity with moods. But not only.

Banks know now that the resource is expensive and prefer to remain jealously sitting on their liquidity cushion. Near their pennies, in sum. It is this extreme caution that provokes the crises of liquidity. And it is not based on the easy assumption that the Greek crisis has effects domino on other European countries and that it is sufficient to quarantine the banking institutions of these States, referring back to the European Central Bank, to avoid bankruptcy. But on another, more prosaic again: do not put all its eggs in the same panier

Although their deposit base is important, almost all banks are structurally borrowing. To grant credits, they constantly need new resources and they rather not enough that too, except for certain establishments such as La Banque Postale. But it's good war, to obtain credit from their counterparts, also need them to know themselves lend when they are with a one-time cash surplus. In itself, this Pact has not altered by the crisis. What has changed is that banks have reduced the amounts that they agreed with each other. None of them wants to take the risk of having a slate of several billion euros due to a colleague. For an identical amount, banks must therefore seek many more institutions. The probability of not closing its accounts because it will miss a few million is higher. Also the liquidity problem it generally in the margin. A few euros lack you, and the problem of liquidity is here!

In this climate of more virtuous management, just as a tap constricts and the domino effect occurs. The latest events are inspiring. New regulations in the United States has led the Management Fund to lend to banks more short-term and the US Federal Reserve (Fed) began gradually withdrawing its liquidity, depriving some institutions of a precious manna. Consequently, European access to liquidity in dollars closed, pushing the institutions of the old Continent to strengthen their cash in euro, which has contributed to a little more dry market.

Under these conditions, measured the risk run central banks, seeking repayment of outstanding credits that they were granted during the crisis. The European Central Bank expected no less of 442 billion euros of European banks 1 juillet It is multiplied doing guardrails and smoothing tools, pulling with one hand, while releasing the other liquidity in the short term, 3 or 6 months. What makes say to some that the output of accommodating liquidity policy is risky or impossible. But is it necessary The infusion of central banks is consubstantial with good management of the liquidity of banks. Go to the window of the ECB must become a sign of good health of the banking system.