NEW YORK (TheStreet) -- UBS (UBS) and Credit Suisse (CS) have firmly denied rumors they accessed short-term dollar funding via the Swiss National Bank amid heightened fears about liquidity problems at Europe's financial institutions.
Under the so-called 'Term Auction Facility,' a number of central banks have a dollar-based swap arrangement in place with the Federal Reserve -- a throw-back to the funding difficulties experienced by banks at the height of the global financial and sovereign debt crises.
Last week the banking industry was beset with rumours that a Swiss bank had accessed the U.S. liquidity facility through the SNB, according to the Financial Times.
In a terse statement issued Friday, UBS said it had not made use of the Fed facility through the SNB, adding, "These rumors are completely unfounded."Credit Suisse also issued a statement denying the rumors. It follows news that the European Central Bank issued a $500 million loan to an un-named financial institution on Wednesday, further fuelling market speculation that Europe's banks may be in trouble. After a massive sell-off across European banking stocks Thursday, some French and German banks stabilized somewhat early on Friday, clawing back some of their losses. Spanish, Italian and British banks continued to suffer, however, despite suggestions the significance of the $500 million loan may be overplayed. Europe's banks were accessing weekly dollar loans of up to $10 billion via the Fed's facility in May 2010 when the sovereign debt crisis was at its most intense. By late morning in New York Spanish banking heavyweight Banco Santander was down 4.28%, Italy's Unicredit was down 2.98% whie Intesa Sanpaolo was down 3.6%. Britain's Lloyds was down 3.59%.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV