Thursday, September 15, 2011
Like a lot of people I'm trying to figure out how scared to be about the European debt situation. The main potential fear is obviously a banking crisis triggered by write-downs of Greek and possibly other peripheral sovereign debt. To that end, I've been poking around the ECB website trying to understand how much the European Central Bank (ECB) is lending to euro-area banks (as a sign of stress that they can't borrow from each other). It's immediately obvious that the ECB balance sheet is an arcane and specialized area of knowledge and in one morning I'm not getting to an adequate state of understanding to really know what I'm looking at.
But - I figure somewhere in the larger blogosphere is someone who knows! So if you know who that person is, point me in their direction.
In the meantime I've found three series that seem from their description to be about lending by the ECB to banks. Up top is "Lending to euro area credit institutions related to MPOs denominated in euro" which shows a suitably massive spike at the time of the 2008 crisis another spike in mid 2010 and a milder run-up more recently.
Next is "Other claims on euro area credit institutions denominated in euro":
That also shows panic in 2008 (and some weird outlier in 2002) a peak in mid 2010 and then even more escalating usage recently.
Next is "Other Liquidity Providing Operations":
Apparently some parties needed a lot of liquidity in late 2009, even more in 2010, which they didn't give back, and now there is another spike in demand for it. Note the scale of this graph is significantly less than the one up top however (all units are millions of euros).
Finally, here is the overall size of the ECB balance sheet:
If anyone can shed more light on the exact meaning of these series or what else to look at I'd be grateful.