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Firms lending cash to banks
BLUE-CHIP names like Johnson & Johnson, Pfizer and Peugeot are among firms bailing out Europe’s ailing banks in a reversal of the established roles of clients and lenders.
One source with knowledge of the so-called repo deals or short-term secured lending, said the two US pharmaceutical groups and French carmaker were the latest to sign up for them.
Europe’s banks are struggling to secure cash to fund their day-to-day business and have largely stopped lending to each other. So a group of well-known, cash-rich companies has stepped into the repo market, which provides a form of lending so far almost exclusively in use between banks.