Sunday, 11 August 2013

Hooray for Hollywood!

By Sean Corrigan

In Europe, the picture on one side of the banking balance sheet remains one of shrinking credit (more especially of the productive, private sector kind which is off 5.1% yoy after three years of relative stasis), and, on the other, of growing money supply, shrinking interbank reliance, and haemorrhaging non-EZ exposure (that first of these having seen its intrazone component reduced by an eighth since mid-2012, the second having fallen by 7%).

Though outright monetary shrinkage is now a thing of the past almost across the Zone, there has been no interruption to the tendency for people to hold assets in their most liquid form, nor for the banks to fail to find anyone other than Leviathan to whom to lend the proceeds – by way of bonds, for example,  this last kind of accommodation is up 12.1% yoy, representing an increment of €200 billion which is almost equal-and-opposite to the coincident €240 bln decline in non-financial corporation loans. Crowding out, anyone?

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