Indeed the situation on the interbank market is still tense

Hit hard on May 10, the European Central Bank (ECB) will make a further gesture to relieve banks The question haunts the markets, while the issuing Institute meets tomorrow. Several hypotheses are circulating, including about a new easing of liquidity measures.

Indeed, the situation on the inter-bank market is still tense. For evidence, the amount of cash deposited on the day the day by banks to the ECB exploded again: banks led to the ease of deposit approximately EUR 350 billion (compared with less than 1 billion before the crisis), which represents as much liquidity fuelling not credit circuit. In other words, financial institutions prefer to store mountains of money to a low rather than lend them.

The sovereign debt crisis has awakened the suspicion between banks and their reluctance to credit between them: from which inter-bank (Libor and Euribor) relatively high levels. The cost of financing in dollars in three months camped on its most senior annual 0.53, while the euro rose yesterday to 0.71. Above all, the cost of liquidity in the interbank market compared to future rates of the ECB - which is measured by the difference between contracts Euribor and Eonia (called "ois - bor") - is always result, although it declined from the annual peak reached towards the end of May.

Problem of maturity

Concerns are high as the eurozone bond market remains under pressure - which reinforces fears about the exposure of banks to loans of State - but also because financial institutions will have to repay 442 billion euros to the ECB in a few weeks. It is in fact the amount they borrowed last summer for an exceptional period of twelve months. This deadline will therefore drop the liquidity they hold currently. "Unimportance however this risk, since the Central Bank has provided a special operation for the granting of liquidity to six days to limit the effect of this rebate", says Patrick Jacq at BNP Paribas.

The amount of liquidity is also perhaps not the main topic of concern. BNP Paribas, the most difficult problem for banks is related to the maturity of funds currently available to them. "Average life of liquidity to the ECB fell less than two months, while banks were essentially needs three months - a year to finance their balance and their operations", said Patrick Jacq. It is one of the reasons for which the speculation is well underway on a possible extension of some operations of the ECB. "At this stage, the Monetary Institute may further down the line to restore injections of liquidity to a year, but it is possible to make a gesture on those three to six months," says Deutsche Bank team. A number of stakeholders believe that the Board of Governors may decide as early as Thursday to maintain the system of the auction fixed rate and total allocation of funds for the three-month refinancing operations beyond the month of June.

The eddies were to persist, the ECB may also act on the bond market, buying more sovereign debt and by diversifying its purchases for the Spain and the Italy including. Last week, the amount of the intervention was limited to 5 billion, while it had exceeded 16 billion in the first week. Remains that the members of the institution are divided on the merits of this program.