Funding - Bankernas Upplåning, som skall rullas runt

Index nejtillemu.com

Index internetional.se

Finanskrisen
EMU Collapse

Rolf Englund IntCom internetional

nejtillemu.com

Bankerna saknade 4.300 miljarder
De största globala bankerna skulle ha haft en brist på kärnkapital i juni 2011,
om de kommande Baselreglerna om kapitaltäckning hade trätt i kraft vid den tidpunkten.
DI/Bloomberg 12 april 2012

Riksbanken analyserar löpande risker och hot mot stabiliteten i det svenska finansiella systemet. Syftet med analysen är att upptäcka förändringar och sårbarheter som kan leda till en allvarlig kris.

De svenska storbankerna har rejäla kapitalbuffertar men beroendet av att låna pengar på den internationella kapitalmarknaden gör dem sårbara vid en likviditetskris.
Den risk som bankerna tar får svenska skattebetalare betala för, enligt Riksbanken.
e24 16 augusti 2011

De svenska bankernas balansomslutning är mer än fyra gånger Sveriges BNP.
Bankerna borde betala mer i skatt. Det säger professor Lars Calmfors.
Professorskollegan Martin Flodén vill se högre krav på kapitaltäckning och riskanpassad avgift till stabilitetsfonden.
Viktor Munkhammar, DI 18 oktober 2011

Martin Flodén tycker också att vore rimligt att diskutera ett regelverk liknande den amerikanska Glass Steagall-lagen som infördes 1932. Lagen separerade investmentbanker från vanliga affärsbanker och gällde fram till 1999.

"ett litet steg mot en finanspolitisk union"
I juli kom EMU-politikerna överens om att öka nödlånsfonden EFSF mer flexibel. Till skillnad från nu ska fonden få stödköpa statsobligationer på andrahandsmarknaden.
I dagsläget har fonden en utlåningskapacitet på ungefär 250 miljarder euro, motsvarande 2.300 miljarder kronor. Fondens storlek ska växa till 440 miljarder euro.
Viktor Munkhammar, DI 2011-09-16

Det skulle minska trycket på centralbanken ECB, som hittills tvingats agera”buyer of last resort”när det hettat till på obligationsmarknaderna. Viktigare ändå är att EFSF ska bli större.

Går allt enligt plan i helgen och under hösten får vi se en biffigare nödlånsfond (och från 2013 permanent sådan i form av ESM).

I praktiken vore det ett litet steg mot en finanspolitisk union och skulle välkomnas av krisländer och finansmarknader. Men för EMU:s kärna ökar riskerna.

För två veckor sedan gick Internationella Valutafondens chef Christine Lagarde ut och varnade för att Europas banker är illa ute.
Minst 200 miljarder euro i nytt kapital behövs för att hejda smittspridningen och det fort, förklarade hon.
Andreas Cervenka, e24, 11 september 2011

Det intressanta med IMF-chefens uttalande är att hon fram till i somras var finansminister i Frankrike, ett land som huserar några av Europas sjukaste storbanker. Då lyste hennes alarmistiska varningsrop med sin frånvaro.

Att hon i sin nya roll uppenbarligen bestämt sig för att ta bladet från munnen gjorde de forna EU-kollegorna rasande.

Europeiska centralbankens chef Jean-Claude Trichet och den bankansvarige EU-kommissionären Olli Rehn avfärdade utspelet som gripet ur luften.

Olli Rehn pekade på EU:s färska stresstester från mitten av juli som minsann visade att bankerna är i finfin form.

Detta test, den andra hälsokontrollen av kontinentens banker på två år, visade sig dock ha struntat i en liten men avgörande detalj: själva problemet. Allting undersöktes utom vad som skulle hända om bankernas enorma innehav av statsobligationer rasade i värde.

Ms Lagarde, IMF managing director, confirmed that the Fund was revising its estimates of the loss of tangible equity in European banks on Saturday, saying the estimated capital losses of €200bn were “tentative” and the Fund was “in discussions with our European partners to assess the global methodology” until the final estimates are published in a Fund paper released shortly before its annual meetings in a fortnight.

På uppdrag av riksdagens finansutskott
– De svenska bankerna var i ett kritiskt skede mycket nära att stå utan tillgång på dollar.
Det löstes enbart tack vare att Federal Reserve var villigt att hjälpa till, säger Charles Goodhart.
DN 31 augusti 2011

Det är på uppdrag av riksdagens finansutskott som Charles Goodhart från London School of Economics och Jean-Charles Rochet från Toulouse School of Economics
har granskat Riksbankens penningpolitik och arbete med finansiell stabilitet under åren 2005–2010. De anser att Sverige har kommit relativt väl igenom finanskrisen, men att det kunde ha gått betydligt sämre

Spanish banks' borrowing from the ECB almost doubled in March from February to 316 billion euros
as the question whether Spanish banks need to be recapitalized hangs over the sector like the sword of Damocles
In January the Spanish government introduced reforms under which
Spanish banks must increase their provisions for property assets by 52 billion euros.
CNBC 13 April 2012

Would Northern Rock or Lehman Brothers have survived if they had had more capital?
Sadly not.
For the reality is that it is not the amount of capital a bank holds that protects it in a crisis,
but its ability to access ready cash for its immediate needs.
Financial Times, 20 January 2012

Just before Christmas, the European Central Bank flooded the financial markets with 500 billion euros
This week has seen the level of deposits at the ECB's overnight facility rise to close to €412 billion
Normally banks tend to lend any excess funds to each other. By doing so, they can make more money
- especially given that interest rates at banks are currently twice as high as those offered by the ECB.
Der Spiegel, 27 december 2011

But the interbank market has been disrupted for weeks now, prompting concerns that the credit crunch last seen after the collapse of Lehman Brothers has returned.

European banks no longer trust each other because it is unclear to what extent individual banks are exposed to government bonds from countries hit by the debt crisis, and whether those institutions are in jeopardy.

When banks can't borrow, they can't lend.
That, in turn, leads to an economic slowdown or even a recession.
And in the worst case, banks that can't borrow go bust because they're unable to repay their own debts as they fall due.
That's why today's offer of three-year loans to the eurozone's banks by the European Central Bank matters
Robert Peston, BBC Business editor, 21 December 2011

Why is it OK for the European Central Bank to lend to Italy and Spain indirectly via the banks, when it's heresy to make direct loans?

The ECB is taking a double solvency risk: on the solvency of the bank to which it lends and on the interconnected solvency of the sovereign standing behind said bank, and to which said commercial bank has lent.

/A shrug is a form of nonverbal communication that is performed by lifting both shoulders up, and is an indication of an individual either not knowing an answer to a question, or not caring about a result/
Wikipedia

The scale of Wednesday's bail-out for eurozone banks by Draghi's European Central Bank (ECB) should simply confirm worst fears.
European banks face a €600bn tsunami of debt coming due in 2012 (mostly in the first quarter)
and many simply can't pay up because the usual source of refinancing, wholesale money markets, are refusing to lend them any more.
Damian Reece, Daily Telegraph, 21 Dec 2011

The banks are under massive pressure to raise their core Tier 1 capital ratios to 9pc by next June.
This requires a €2.5 trillion adjustment according to the BIS’s Global Stability Board.
Most of that is going to be done by slashing loan books – deleveraging in the jargon –
since they cannot raise fresh capital at a viable cost and don’t wish to be nationalised.
Ambrose Evans-Pritchard, December 21st, 2011

The ECB lowered its benchmark interest rate from 1.25% to 1% to try to mitigate the coming recession.
It agreed to provide unlimited cash to commercial banks for up to three years, at its main interest rate,
to replace the medium-term funding that private investors are unwilling to extend.
The Economist print, Dec 17th 2011

You are all wrong, printing money can halt Europe's crisis
Ambrose Evans-Pritchard , December 1st, 2011

A near universal view has emerged that Europe's crisis can only be solved by governments and fiscal policy, with varying views over the proper dosage of pain.

For Italy, meaning that markets are now pricing in outright deflation. For a country with public debt stock of 120pc of GDP, that is a death sentence.
Here is the latest Italian money chart from the Banca d'Italia

The eurozone economy is in imminent danger of crashing into deflation, bringing down the whole interlocking edifice of sovereign debt and distressed lenders. And bear in mind that Europe's bank nexus — including the UK, Swiss, Scandies — is €31 trillion. Big stuff.

This crisis can be stopped very easily by monetary policy, working through the old-fashion Fisher-Hawtrey-Friedman method of open-market operations to expand the quantity of money, ideally to keep nominal GDP growth on an even keel.

This does not solve the 30pc intra-EMU currency misalignment between North and South, of course, but it quite literally "solves" the solvency crisis for Italy and Spain. They would not be insolvent if the ECB had not driven them into depression by letting their money supply implode.

Since July these markets have frozen up almost completely for European banks. Bond issuance has plunged (see chart)

and has shifted towards secured bonds, which are backed by assets that investors can grab if the bank defaults.

An area of particular vulnerability, the “nightmare scenario” in the words of one banker, is that the trickle of deposits leaking from banks in peripheral countries turns into a full-flood bank run.

The risk that savers will lose faith in banks seems remote for now. Yet it is not unthinkable. Greek depositors have been shifting their money for the past year. Savers in Italy and Spain now appear to be starting to do the same.

And large corporations, which are able to shift deposits easily, are seeking relative safety, either with large banks in core countries or further afield.

German Bund yields have risen to 59 basis points above Swedish bonds
Should the Fed save Europe from disaster?
The dam is breaking in Europe. Interbank lending has seized up.
Much of the financial system is paralysed, setting off a credit crunch just as Euroland slides back into slump.
Ambrose Evans-Pritchard, 27 Nov 2011

America’s money markets are no longer willing to lend to over-leveraged Euroland banks, or only on drastically short maturities below seven days. Exposure to French banks has been slashed by 69pc since May.

Italy faces a “sudden stop” in funding, forced to pay 6.5pc on Friday for six-month money, despite the technocrat take-over in Rome.

Needless to say, reflation alone will not make Euroland a workable currency area. Nor will fiscal union, Eurobonds, and debt pooling down the road.

"Even if they do two years of fiscal transfers, and the ECB buys all the bonds, and the problems are swept under the carpet, we are still going to be facing a crisis at the end of it," said professor Scholes.

Are markets betting on IMF bailout of Italy?
Eurozone banks have placed 256bn euros on deposit at the ECBat its penally low interest rate
rather than take the risk of lending the cash to other European banks.
Robert Peston, BBC Business editor, 28 November 2011

European banks have sold $413bn worth of bonds this year,
equivalent to just two-thirds of the $654bn that is due to be returned to investors in 2011 as the debts mature
Financial Times, November 27, 2011

That leaves the banks with a $241bn funding gap in 2011, the first time European lenders have collectively been unable to replace their maturing debt with new bonds for at least the past five years.

Firms are pulling deposits from peripheral countries’ banks. This backdoor run is forcing banks to sell assets and squeeze lending;
the credit crunch could be deeper than the one Europe suffered after Lehman Brothers collapsed.
The Economist print Nov 26th 2011

Euro-zone leaders say they are determined to save the single currency. But the smart money is voting with its feet.
Simon Nixon, Wall Street Journal, 23 Nov 2011

First, short-term U.S. dollar-funding markets effectively closed, then the senior unsecured-bond markets shut down, then the interbank market. Now, corporate customers appear to be withdrawing their deposits from some countries' banks. With an estimated €1.7 trillion ($2.29 trillion) of funding to roll over in the next three years, the stresses in the euro-zone banking system look doomed to get worse.

In aggregate, European banks’ loans exceed their deposits,
so they rely on wholesale funds — short-term bills, longer-term bonds or loans from other banks — to bridge the gap.
The Economist, print Nov 26th 2011

Unsecured lending between banks evaporated and the cost of secured loans rose Friday.
Dwindling trust between the banks is forcing them to rely more and more heavily on the European Central Bank (ECB) to fund their activities,
which in turn is spooking investors concerned about the health of the countries funding the ECB.
The head of Europe's seventh-largest bank, Deutsche Bank's Josef Ackermann, said long-term funding was increasingly hard to obtain.
"The willingness of investors to make long-term investments in banks is not very pronounced."
CNBC 18 Nov 2011

German treasury bills of up to 9 months were bid at rates as much as 0.35 percent, but sellers were asking for prices that would imply negative yields of as low as minus 0.30 percent.
Negative yields means investors are willing to pay to keep their money in T-bills, rather than keep money in a bank deposit and receiving interest.

“It’s a pretty terrible spiral,”
Nervous investors around the globe are accelerating their exit from the debt of European governments and banks,
increasing the risk of a credit squeeze that could set off a downward spiral.
New York Times 18 Nov 2011

Financial institutions are dumping their vast holdings of European government debt and spurning new bond issues by countries like Spain and Italy.

And many have decided not to renew short-term loans to European banks, which are needed to finance day-to-day operations.

“It’s a pretty terrible spiral,” said Peter R. Fisher, vice chairman of the asset manager BlackRock and a former senior Treasury official in the Clinton administration.

At issue is the overall size of Europe’s banking system and its reliance on the wholesale funding markets.
With $55,000bn in assets, the sector is more than four times the size of its US counterpart.
As a result, Europe’s banks are primarily funded by the wholesale markets, a much less stable source of financing than deposits.
At roughly $30,000bn, the sector’s reliance on wholesale financing markets is roughly ten times that of the US.
Oliver Sarkozy, FT October 24, 2011

Assuming a three-year average life to the $30,000bn in wholesale funding outstanding, the European banking system needs to generate over $800bn in cash per month to fund maturing obligations. This is unsustainable.

Fitch on Thursday evening placed several financial institutions on its watch list, suggesting that they might be downgraded.
Among them was German market leader Deutsche Bank, long considered a model of financial health, despite the global crisis.
Der Spiegel 14 oktober 2011

"These institutions' business models," said Fitch in a statement, "are particularly sensitive to the increased challenges the financial markets are facing."

Joining Deutsche Bank on Fitch's list of banks that may face a downgrade in the near future are Bank of America, Credit Suisse as well as France's BNP Paribas and Societe Generale. Morgan Stanley and Goldman Sachs are also at risk of a downgrade. The ratings agency also announced on Thursday that it had dropped the Swiss bank UBS by a notch.

The broad problem is clear:
Bank balance sheets are stuffed full of government bonds issued by the 17 euro-zone governments
— courtesy of misguided capital rules that encouraged lenders to gorge on these assets by ascribing zero risk to sovereign debt.
Francesco Guerrera, The Wall Street Journal's Money & Investing editor, 27 Sept 2011

As a result, the prospect of defaults by one or more euro-zone countries has scared investors into worrying about the health of the bloc's financial sector.

As a big hedge-fund manager told me last week:
"We never, ever, thought that countries like Greece or Spain could default. Defaults were the stuff of developing countries like Argentina and Russia."

Banker bör givetvis inte plancera sina, och spararnas, pengar i statsobligationer.
Det passar bättre för försäkringsbolag där en förlust inte får samma utväxlning.
Men bankerna har sett till att politikerna har ordnade det för dem. I de nya kapitalreglerna för banker, Basel III på finansfikonspråk, som är tänkta att tämja bankernas spekulation, klassas alla statspapper som helt riskfria.
Att låna ut till en stat anses så säkert att det inte kräver någon kapitalbuffert alls, något som gett bankerna skäl att köpa på sig ännu fler obligationer.
Rolf Englund blog 2011-09-01

For the past three months, European banks have been largely unable to sell debt at affordable prices
the amount of senior unsecured debt issued by the Continent's financial institutions this quarter is on track to be
the smallest of any quarter in more than a decade
WSJ 27 Sept 2011

For the past three months, European banks have been largely unable to sell debt at affordable prices to investors, who are wary of the banks' vulnerability to risky euro-zone government bonds and other loans.

At $34 billion, the amount of senior unsecured debt issued by the Continent's financial institutions this quarter is on track to be the smallest of any quarter in more than a decade, according to data provider Dealogic. Most of those were bite-size deals of less than $500 million apiece.

Traditionally, issuing such debt has been among the most popular ways for banks to finance themselves over the long term.

Fear stalks the corridors at IMF summit
The first step would be the widescale recapitalisation of European banks in France, Germany and beyond to allow them to absorb sovereign debt losses,
regain access to funding markets and reverse the destructive contraction of credit sweeping the eurozone.
Jeremy Warner 24 Sep 2011

Recapitalisation would be followed by measures to leverage up the size of the European bail-out fund using liquidity provided by the European Central Bank to the tune of several trillion euros, or enough to backstop larger eurozone nations such as Italy and Spain.

Once these measures were in place, an orderly default of perhaps as much as 50pc of the value of Greek sovereign debt could be sanctioned.

All this is supposedly being done to save the euro. Nonsense. It's not actually about the euro.
Three years after the collapse of the Lehman Brothers investment bank, it is to forestall a new banking crash
which would supposedly have catastrophic, difficult to control consequences.
Der Spiegel, 23 Sept 2011

A number of important financial institutions in Europe, particularly in France, have accumulated large amounts of Greek, Italian and Portuguese bonds. And not all of them have written them off at their actual value.

The 21 July agreement gives the €440bn European rescue fund discretion to use the money for bank bailouts
What we are dealing with here is not so much a sovereign debt crisis as a profound banking crisis.
Governnments must take immediate steps to recapitalise their banking systems.
Central bankers on Thursday moved to offer further liquidity support. Funding difficulties are only symptom of solvency crisis.
Jeremy Warner, DT September 16th, 2011

Their promise to lend truckloads of dollars to any bank finding itself a bit short of the greenback may have calmed the febrile markets – for one day at least.
Central banks don’t do that sort of thing unless something is up; and something is most certainly up.
In the eurozone, an unfolding Greek tragedy is careering towards its final, brutal act.
And, in our joined-up, global economy that spells trouble everywhere, with the odds shortening by the day on a return to recession.
Alistair Osborne, DT 15 Sep 2011

After the creation of the euro in 1999, European nations that had previously been considered risky,
and therefore faced limits on the amount they could borrow,
began experiencing huge inflows of capital.
After all, investors apparently thought, Greece/Portugal/Ireland/Spain were members of a EMU, so what could go wrong?
Paul Krugman, New York Times, 22 May 2011

The central banks are to provide commercial banks with
three additional tranches of loans to help ease funding pressures.
BBC 15 September 2011

Speaking in Washington, she said: "Uncertainty hovers over sovereigns across the advanced economies, banks in Europe, and households in the United States.

Central bankers across the globe acted today to end
a growing dollar liquidity crunch for European banks
CNBC, 15 Sep 2011

The European Central Bank effort is being launched in coordination with the Federal Reserve, The Bank of England, The Bank of Japan and the Swiss National bank.

IMF, in its global financial stability report, stuck to its estimate that
the European banking sector needed a recapitalisation of €200bn as a direct result of the debt crisis.
Eurointelligence 22 Sept 2011

The tally would rise to €300bn if the knock-on effects of banks’ holdings in each other were also taken into account. European governments have been reeling about this estimate.

Interestingly, the ESRB, chaired by Jean-Claude Trichet, yesterday came out in support of the IMF, saying that the best way to beat the crisis would be to increase capital buffers.

Från januari 2011 införs en ny struktur för tillsyn över EU:s finansiella marknader: Europeiska systemet för finansiell tillsyn, ESFS.

Där ingår Europeiska systemrisknämnden ESRB (European Systemic Risk Board) och de tre tillsynsmyndigheterna, ESA (European Supervisory Authorities). De tre tillsynsmyndigheterna är: Europeiska bankmyndigheten, EBA (European Banking Authority), Europeiska försäkrings- och tjänstepensionsmyndigheten EIOPA (European Insurance and Occupational Pension Authority) och Europeiska värdepappers- och marknadsmyndigheten ESMA (European Securities and Markets Authority). Dessa tre myndigheter ersätter de tidigare kommittéerna CEBS, CEIOPS och CESR.

Reuters has the story that the EFC had produced a (no longer) confidential report in preparation for this weekend’s informal meeting of finance ministers, in which it warned of a renewed credit crunch, as the sovereign debt crisis spills over to banks.

The proposal warned of a "risk of a vicious circle between sovereign debt, bank funding and negative growth".

The EFC said contagion had spreads across countries and markets, and the crisis had now become systemic.

The Committee is composed of senior officials from national administrations and central banks, the ECB and the Commission

Embattled French bank BNP Paribas has been forced to deny rumors, published in the Wall Street Journal,
that it has been struggling to gain dollar funding from US money market funds.

CNBC 13 September 2011

After Stark
Moody’s is likely to downgrade BNP Paribas, Crédit Agricole and Société Générale today
Le Monde: ECB buying bonds in order to avoid an explosion of the eurozone.
Eurointelligence Daily Briefing 12/9 2011

In its front page editorial Le Monde argues that the euro governments didn’t leave the ECB any other option than to buy the debt of the crisis countries.
“Without any doubt the ECB did not have a choice”, the paper writes.
“It came to help those countries in order to avoid an explosion of the eurozone.”

It is not the ECB’s fault, Le Monde argues, but rather that of the member states which “have let their debt grow and that of the others who have never grasped the existential nature of the crisis that affects the euro.”

Moody’s is likely to downgrade BNP Paribas and Crédit Agricole by one notch and Société Générale by two notches today, Le Figaro reports. The reasons the paper quotes are the bank’s exposure to Greek debt and their shares’ massive loss of value.

Wholesale funding is a method that banks use in addition to core demand deposits to finance operations and manage risk.
Wholesale funding sources include, but are not limited to, Federal funds, public funds, foreign deposits, brokered deposits, and deposits obtained through the Internet
Wikipedia

Officials said Ms Lagarde’s comments missed the point of banks’ current difficulties.
“The key issue is funding,” said one experienced central banker.
“Banks in some countries have had trouble securing liquidity in recent weeks and that pressure is going to mount.
FT 29 August 2011

European officials rounded on Christine Lagarde on Sunday, accusing the managing director of the International Monetary Fund of making a “confused” and “misguided” attack on the health of Europe’s banks.
Ms Lagarde, the former French finance minister who replaced Dominique Strauss-Kahn as head of the IMF in July, used her address at an annual meeting of central bankers in Jackson Hole, Wyoming, to call for an “urgent” recapitalisation of Europe’s weakest lenders, saying that shoring up the banking system was key to cutting “chains of contagion” across the region.

Officials, nervous that Ms Lagarde’s statement would further spook bank investors, said they planned to urge the former French finance minister to clarify her statement.

"The rather surprising degree to which eurozone banks depend on short term financing"
Gillian Tett, 25 August 2011

US money market funds have been quietly backing away from European banks, either refusing to roll over loans, or slashing the maturities of the funds they provide.

This quiet exodus has reminded US and European investors alike of something that policymakers have hitherto tended to downplay:
namely the rather surprising degree to which eurozone banks depend on short term financing.

Morgan Stanley, for example, calculates that of the €8,000bn funding that is currently in place for the largest 91 eurozone banks, some 58 per cent needs to be rolled over in the next two years.

More startling still, some 47 per cent of this funding is less than a year in duration. Much of that is in euros.

Investors are once again concerned about the stability of the banking system, and are pushing up liquidity margins back to crisis level.
We are talking mostly about a European sovereign debt crisis, but in recent weeks the old money markets crisis has returned to the eurozone, as the interbank-market has become subject to renewed stress.
Eurointelligence 23 August 2011

One of the many crisis indicators has been the Libor-OIS spread, a measure of bank vulnerability perceptions. It is the gap between the Libor money market rate and the overnight swap rate. Unlike the Libor, the latter is considered safe as the transacting counterp

"The (Swedish) banks have full access to liquidity and all (borrowing) markets are open,"
Mattias Persson, head of the Financial Stability Department at the Riksbank told Reuters.
"We have gone through all our routines and we can supply liquidity if needed, both in crowns and in foreign currencies," Persson said.
In the previous crisis, the Riksbank loaned Swedish banks 100 billion dollars in total between October 2008 and November 2009 and has since strengthened its foreign currency reserves.
Reuters 19 August 2011

As markets convulsed in September 2008, Morgan Stanley (MS) Treasurer David Wong briefed the Federal Reserve on a “dark” scenario in which the U.S. firm would need at least $10 billion of emergency loans from the central bank.
It got 10 times darker by month’s end. Morgan Stanley borrowed $107.3 billion, the most of any bank, according to data compiled by Bloomberg News using information released in response to Freedom of Information Act requests, related court orders and an act of Congress

Falls in eurozone bank shares have set off warning bells for the bloc’s banking sector.
It is a false alarm – for now.
Financial Times editorial 23 August 2011

Alarmism risks fuelling the sort of misdiagnosis that has already made governments throw good taxpayer money down holes dug by banks themselves.

Four years to the month since the global credit crisis began,
European lenders remain dependent on central bank aid, plaguing markets and economies worldwide.
Bloomberg 23 August 2011

Emergency steps such as unlimited loans from the European Central Bank are keeping many banks in Greece, Portugal, Italy and Spain solvent and greasing the lending of others, while low interest rates and debt-buying are containing borrowing costs. Such aid is needed as concerns about slowing economic growth and sovereign debt prompt banks to curb lending, stockpile dollars and hoard cash in safe havens.

“I’m not sleeping at night,” said Charles Wyplosz, director of the Geneva-based International Center for Money and Banking Studies. “We have moved into a new phase of crisis.”