Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
You say
European banks ... are still finding short term funding in dollars, but they are no longer having enough long term funding in dollars.


And that means European banks, borrowing dollars from US money market funds and lending long term - the banks' traditional role of maturity conversion (ie using short term deposits to do long term investment). Trust is essential for such activity, and it's disappearing fast.

Do the European banks really fund themselves long-term in dollars, and aren't you contradicting yourself when you say the European banks have no trouble finding short term funding in dollars, only to later say that short-term money market funds are disappearing?

This may make your argument harder to understand.

Economics is politics by other means

by Carrie (migeru at eurotrib dot com) on Thu Sep 15th, 2011 at 09:03:44 AM EST

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