The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Bond Outlook by bridport & cie, October 12 2011

Though euro crisis is not yet over, the banks are being made to recapitalise in readiness for Greek debt restructuring.

Last week, we deliberately turned our attention away from Europe to the USA, as we were waiting for action, rather than mere words, from European leaders. This week we return to Europe, even though the final details of the euro rescue plan are still to emerge.


While the politicians are fiddling, the banks are burning. Dexia has been consumed by the flames, but the fire is far from extinguished. Banks in Europe have lost all mutual trust. They are depositing spare cash not with each other, but with the ECB, while those who need to borrow are also turning to the central bank. In addition, some multi-nationals in Europe, reflecting their lack of confidence in banks, are depositing their spare cash directly with the ECB, who we can only assume are making an attractive spread as both a deposit-taking and lending agency!


Since Libor rates are reflective of inter-bank lending, they presently have little meaning. However, rates are still being published, albeit at artificially low levels, which naturally helps keep down the interest costs of floating rate notes – issued mainly by banks.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree