Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
After 2008 it was suggested in the USA that banks looked at their own books and thought: "If I am in this shape, what are conditions like in these other banks? At that point they became unwilling to lend to one another even overnight.
I think we had been suggesting this here on ET since 2007. The interbank market froze in August 2007 and has stayed tight since.

The ECB was decisive in its liquidity provision, and one of its first unlimited liquidity operations was a two-week tender to tide banks over year-end in 2007 already. When unlimited liquidity at the wekly repos was introduced in October 2008 it was just more of the same.

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 Carrie (migeru at eurotrib dot com) on Tue Mar 1st, 2011 at 04:12:55 AM EST
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I have two concerns here: that I might be way off base and that I might be glaringly obvious. But I am doing the best I can. :-)

"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 07:56:44 PM EST
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