Central bank flight to Federal Reserve safety tops Lehman crisis

[Hawkowl]

A key warning signal of global financial stress has shot above the extreme levels seen at the height of the Lehman crisis in 2008.


Data from the St Louis Fed shows that reserve funds from "official foreign accounts" have doubled since the start of the year, with a dramatic surge since the end of July when the eurozone debt crisis spread to Italy and Spain. "This shows a pervasive loss of confidence in the European banking system," said Simon Ward from Henderson Global Investors. "Central banks are worried about the security of their deposits so they are placing the money with the Fed."
...
Lars Tranberg from Danske Bank said European banks are reduced to borrowing dollar funds for "a week at a time" rather than the usual six to 12 months. "This closely resembles what happened in late 2008, though the difference this time is that the major central banks have dollar swap lines in place. If the dollar funding markets completely freeze up, the European Central Bank can act as a backstop."

http://www.telegraph.co.uk/finance/financialcrisis/8736204/Central-bank-flight-to-Federal-Reserve-safety-tops-Lehman-crisis.html

[truedelphi]

1. Can someone explain what this means?

Europe is in trouble, and so they are borrowing for only a week, rather than some months. That much I follow.

But what are all the repercussions of this?

[truedelphi]

2. Is it a lot of made up hoopla, so that someone can Bail Mr Someone Big out?

While avoiding Bailing out whoever has the misfortune of being the "Lehaman style" competitor?

And there was this comment at the end of the article:


"European banks are still struggling to access America's $7 trillion money market funds"

- don't worry about it. The good ol' tax payer 'll give it to ya "

####

What does this money market fund represent?