Banks saving with ECB rather than lending
Banks placed €90.5bn with the European Central Bank last night rather than lend to each other as tension grow in the sector, new figures reveal.
The figures are the highest since August 8 when €145bn was deposited.
And while the ECB is taking the situation seriously, it is not as dramatic as the financial crisis in 2008, according to economist Juergen Stark, who is also on the board of the bank.
“Banks in certain regions of the euro zone prefer to deposit their surplus cash with the ECB rather than lending it to other banks. We take these signals seriously,'” Mr Stark told the German business daily Handelsblatt.
“The situation is not comparable to that in the autumn of 2008 after the failure of Lehman Brothers,'” the US investment bank that collapsed at the end of that year sending the financial crisis global.
He also poured cold water on the euro bond concept as a way to deal with the eurozone debt crisis.
“We would need a European constitution with sovereignty transfers from all countries. Only then would eurobonds mean anything,” he said.