Funding difficulties persist for European banks

This follows from the last quarterly report of the Bank for International Settlements (BIS).

The sovereign debt crisis and the increased dependence of banks, especially the French and Italians, the liquidity of the ECB.

Increases the reluctance of banks to lend to them.

Each is more difficult to find funding dollars.

The difficulties of funding for European banks will persist due to the sovereign debt crisis, which has increased the dependence of French and Italian banks the liquidity of the European Central Bank ( ECB ).

This follows from the last quarterly report of the Bank for International Settlements (BIS) in December, released this Sunday, in which analyzes the situation of public debt markets and banks. The BIS, based in the Swiss city of Basel , remember that the end of 2014 bank debt maturing in the amount of $ 2 trillion (1.5 trillion euros).

13% of this amount is government guaranteed debt, which has been produced primarily in 2009 maturities that may hinder its extension to reasonable terms. Due to the increasing reluctance of banks to lend to each other, "of the interbank market effectively shifted the balance of the Eurosystem", notes the BIS.

The use of ECB deposit facility where banks can deposit their money in one day has already passed the 300,000 million euros and the ECB's lending to banks has doubled this amount does not include emergency assistance individual banks.

More than half of ECB loans to European banks has gone to French banks, Irish and Italian . French banks have borrowed 141,000 million euros. Italian banks have also borrowed 111,000 million, increasing its reliance on ECB funding to 2.8% of their balance sheets.

Difficulty dollar funding

European banks also have many difficulties to find financing in dollars in U.S. money market which has increased the cost of dollar-euro exchange to the highest level since December 2008. The mutual fund money market U.S. finance have left European banks (-42% from late May) to avoid indirect exposure to sovereign debt risk, according to the BIS.

Emerging markets have been adversely affected by the crisis in the euro area to alleviate the funding constraints, the ECB announced this week two new liquidity operations in euros with a maturity of three years. In addition, six major central banks around the world, led by the U.S. Federal Reserve (Fed) and the ECB agreed on a concerted action to halve the cost of dollar swap lines and establish lines of trade in other currencies .

The BIS notes that the premium paid by financial institutions to exchange euros in dollars fell from 151 to 119 basis points, after learning of concerted action.

In the reporting period, between early September and December, banks in the euro area have tightened the conditions and have increased interest rates on loans to businesses and homes and planned to do so in the fourth quarter. One of the key factors behind this hardening was the worsening of the conditions to which the banks themselves get funding. For example, syndicated loans in the proportion of banks in the euro area in global new loans fell in October to 18% from 26% a year earlier.

The average interest rate of all new loans from banks in the euro area companies increased one percentage point year on year to end September. Banks in Greece and Portugal increased interest rates by two percentage points.

The emerging markets have been adversely affected by the crisis in the euro area, which has led investors to withdraw 25 000 million (18.797 million euros) of emerging market funds in August and September, especially equity funds . There has been a repatriation of assets by investors in the euro area. The withdrawal of 25,000 billion emerging markets fund portfolio inflows match of 85,000 million euros at the euro area, a large part of France.