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If this is correct, we're looking at a very long bank run indeed, lasting over 28 months now, and counting.

But also, the EONIA cardiac arrest would reflect growing tensions within the group of healthier banks.

Not good at all.

So, in what may be my last act of "advising", I'll advise you to cut the jargon. -- My old PhD advisor, to me, 26/2/11

by Migeru (migeru at eurotrib dot com) on Sun Feb 27th, 2011 at 01:19:04 PM EST
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Isn't "the longest bank run ever" roughly what you would predict if you tried to handle a solvency crisis as if it were a liquidity crisis?

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Feb 27th, 2011 at 02:05:29 PM EST
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How long was the bank run at the start of the Great Depression in the US?

So, in what may be my last act of "advising", I'll advise you to cut the jargon. -- My old PhD advisor, to me, 26/2/11
by Migeru (migeru at eurotrib dot com) on Sun Feb 27th, 2011 at 03:04:10 PM EST
[ Parent ]
November 1930 to March 1933. 29 months.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
by A swedish kind of death on Sun Feb 27th, 2011 at 04:14:27 PM EST
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Woo hoo, go Yurp!

So, in what may be my last act of "advising", I'll advise you to cut the jargon. -- My old PhD advisor, to me, 26/2/11
by Migeru (migeru at eurotrib dot com) on Sun Feb 27th, 2011 at 05:38:49 PM EST
[ Parent ]
Migeru:
growing tensions within the group of healthier banks

The break in mid-2010 is so striking that this is unlikely to be a gradual process of loss of trust between banks for overnight lending. What we need is a handle on how real overnight rates are agreed on between banks. What can raise the rate (which is an average) several days in a row? And even spike above the MRO rate? Scarcity of money overall, or non-trustworthy banks looking for deals on that market, both..?

by afew (afew(a in a circle)eurotrib_dot_com) on Sun Feb 27th, 2011 at 03:57:48 PM EST
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And what are the options of healthy banks wrt lending overnight. Can they pick and choose to whom they will lend or is there some other factor at play?

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Mar 2nd, 2011 at 08:51:01 PM EST
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