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Banks borrow at the low interbank rate, then lend to trust companies and smaller banks who in turn make riskier loans.
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The central bank's offer was designed to underpin banks' finances and restore some confidence in the sector, but the sovereign debt crisis means many institutions still lack the trust to lend to each other and prefer to park their money at the E.C.B.
It is the spivvy successor to "traditional banking", in which regulated commercial banks lent money to trusted clients and held the debt on their books.
After Lehman's collapse, trust among financial institutions evaporated and banks refused to lend to one another.
It would lend to banks.
Banks calling in loans from Carlyle Capital, part of the Carlyle Group, represented by some of the supposedly most well-respected people (men) in U.S financial and political spheres, simply do not believe they may be paid back, they don't trust those they lended to when times were good.
But regulators are also apparently becoming much more concerned about banks' domestic lending and much less inclined to trust other supervisors.
If they're going to lend you a lot of money, they've got to trust you".
–lending to "uncreditworthy" companies.
The positive relationship lends support to the theory that trust arises from vulnerability and therefore is potentially higher when there is a greater need to trust.
We do it with care and thought and lend our trust to a small number of companies that we launch, because we think they are really worth it.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com