ABSTRACT
The euro would reveal itself as neither purely private bank money nor state money, but contractual money. As P. Paech observes, the vanishing of the distinction between money, claim and security makes it possible to assign to these positions a monetary value which is the market value. The European Central Bank was aware that reducing the size of the repo market would require a return of unsecured lending between banks and that there was no sign that banks were ready to go back to the pre-crisis pattern of reciprocal lending. As Paech writes, the use of repos increases profits as it permits increasing leverage. It has been claimed that the special status of repo claimants will change with the introduction of the new resolution regime in the European Union. While loans may carry higher regulatory costs than securitized mortgages, the same is true of the other side of banks' balance sheets.
