Sunday, May 4, 2008
Who is the daddy
All the major central banks are now busy using their own assets to support their respective banking systems. However, which one has the most resources?
No surprises here; by some distance, it is the ECB. In fact, in terms of assets, it is over twice as big as the Fed, and over ten times bigger than our dear old Bank of England.
The ECB won't need any special liquidity scheme. They still have plenty of space on their balance sheets for any rotten Irish or Spanish banks that need a little support.
With a central bank balance sheet like the ECB's, UK banks must be wailing and gnashing. If only the UK had accepted the euro.