Many EU banks are facing bank runs as panicked depositors withdraw their money, fearing for its safety. The banks need to borrow money to cover these withdrawals as all banks lend out most of the money they take in deposits. The European Central Bank (ECB) can provide that cash through loans.
Up to now, the ECB would loan money to a bank if the bank put up some solid collateral. The struggling banks have run out of solid collateral and are on the verge of failing. As soon as one big bank fails, the EU bank run will become widespread as no one will trust any bank. To prevent this, the ECB is now accepting things like mortgages as collateral. That is, the banks can use loans to guarantee loans.
This is problematic in places like Spain, where real estate prices have cratered and mortgages are no longer backed by anything real. Those mortgages can be wiped out if the homeowner bails out and declares bankruptcy. In short, the ECB is accepting unenforceable IOUs as collateral.
Going further, the ECB may soon stop considering credit ratings from external sources like Moody's when it makes it's loans. So those nasty credit agencies don't like you? Well fie on them! We'll give you money anyway!
This is all nonsense. No one expects Spanish mortgages to have any real value for a long time to come and Moody's is just playing by the rules. Freaked out by the prospect of mobs of raging customers banging at the doors of big, European banks, the ECB is throwing away standard measures of creditworthiness and is simply handing out money in exchange for dryer lint.
Thanks to your dryer, you may have vast sources of untapped wealth!