Interbank lending between banks which use European government bonds as collateral has reached record levels, this is occurring whilst we have all the issues with possible defaults with the PIIGS countries. Lending between banks without collateral has ground to a standstill. This type of lending is hitting new highs in comparison to highs during the last financial disaster in 2007. Portugal is struggling to finance using it's bonds as collateral. This may need the European Central Bank to start printing and pumping again.
Be afraid....be very afraid. If this gets out of hand again, we'll have another crash. It's a sign of no trust of governments in paying their debt....aka. Greece & Portugal in the firing line, followed closely by Italy.
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