Sunday, October 5, 2008

No Euro T-Bill Equivalent a Problem

From Tyler Cowen:

Other news is that the German government-led bank consortium to rescue Hypo Bank has fallen apart, not a good sign. The German government has today moved to guarantee all "private savings deposits" [private Sparanlagen], also not a good sign. Which other countries will now follow suit? All of them? Europe as a whole lacks a safe asset as focal, liquid, and available as T-Bills and now that is becoming a problem.

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