The European Central Bank will “supervise” 6,000 banks in the euro area, including savings banks and regional German public banks, but the degree of direct supervision may vary depending on the banks and the involvement of other regulators.
The German newspaper Handelsblatt reported in its Friday edition that sources from the European Commission (EC), the European Union’s executive, wants the ECB to gain supervision of euro zone banks and not only [...]
The euro was little changed against the dollar on Thursday after hitting a record low against the Australian dollar and a 3-1/2-year trough versus sterling, as weak U.S. data and Germany’s fresh warnings about Spain’s banking troubles diminished risk appetite.
A slew of soft U.S. economic data affirmed views that recovery in the world’s largest economy has stalled, prompting investors to pare back positions in risky but higher-yielding assets.
Since the 2007 financial crisis, immense imbalances have formed within the otherwise harmless payment system that exists between the central banks of the 17 euro-zone member states. While Italy, Spain, Ireland, Portugal and Greece, all hit hard by the debt crisis, show deficits totaling over €600 billion, the claims owed the Bundesbank have climbed to €498 billion.
Euro-Zone Central Bank System Massively Imbalanced (Der Spiegel 03/06/2012)http://www.spiegel.de/international/europe/…posted by wr;)
The problem with bank runs is that once they start, they don’t stop. And while the world was conveniently distracted by events in Greece, debating whether or not people were withdrawing money in droves (they were), the real bank run happened elsewhere, namely in Spain, where just nationalized bank Bankia moments ago plunged 30% and was halted following an El Mundo report that “customers had withdrawn €1 billion over the [...]
From Acting Man:
Below is a selection from our usual credit market chart update — CDS on various sovereign debtors and banks, bond yields, euro basis swaps. Charts and price scales are color coded (readers should keep the different scales in mind when assessing 4-in-1 charts). Prices are as of Friday’s close – European markets are closed today on account of the Easter Monday holiday.
We decided to post this selection to [...]
The European Central Bank’s recent LTRO programs have effected a significant increase in the amount of encumbered assets — those pledged as collateral in repo transactions, central bank funding operations, and covered bond issuance as lenders increasingly demand over-collateralized borrowing arrangements to protect against credit risk — on balance sheets across the pan-European banking system.
According to Barclays, average encumbrance across banks has risen dramatically to around 21% of assets. German [...]
I use this reference to an old Marlon Brando movie, on man’s hidden impulses, as an allegory to try and understand the Euro zone financial collapse. Here is the time line as I understand it and the key calls made at each instant.
1° At the early 2009 G20 meeting in London, Merkozy started their two ‘man’ divergent act. Merkel reminded the world that ECB was independent. Sarkozy said we needed [...]
Just some headlines:
China’s Dagong rating agency downgrades France
Those wondering what caused the accelerated reacquaintance of the EURUSD with gravity on its way to what UBS has just dubbed the “beginning of the end” (report to be published shortly), need look no further than the ECB where the ECB had its first failed sterilization since the expansion to monetize Italian and Spanish bonds was launched in August. As noted yesterday, the ECB had to sterilize €203.5 billion [...]
The European Banking Crisis: Assessing the Damage and a Look Ahead
Editor’s Note: This is the first installment in a two-part series on the European banking crisis.
Special Series (Part 2): Looking Ahead in the European Banking Crisis
Europe faces a banking crisis it has not wanted to admit even exists.
The formal authority on financial stability, International Monetary Fund (IMF) chief Christine Lagarde, [...]
More Euro Nations Face Downgrade After Italy, Moody’s Says
October 2, 2011
The eurozone crisis entered a new phase this weekend with France and Belgium racing to rescue a large continental bank.
The countries’ finance ministers meet tomorrow to discuss the future of Dexia, one of Belgium’s largest lenders, with 35,000 staff and 8m customers in Belgium, Luxembourg and France. It has been crippled by the collapse of the inter-bank lending markets and large exposures to [...]
by Phoenix Capital Research
While the financial world becomes euphoric based on an unsubstantiated rumor of yet another European
Indeed, a mere two weeks ago
Dollar Funding Costs Rise As Central Banks’ Plan [...]
First it was US money markets; then it was various European industrial concerns (which somehow double down as banks); then it was China; now the bank runs shift to insurance institutions when, as Bloomberg reports, Lloyd’s of London has decided to pull peripheral Euro bank deposits. What next: complete collapse of European interbank market as bank runs become a daily thing at both the retail [...]
Saab Files for Bankruptcy Protection
Decrease in federal stimulus money blamed for Iowa closures, layoffs
GAO report backs up Postal Service’s dire warning
Greece euro exit can’t be ruled out – German CSU head
White House to Propose Plan to Help Postal Service
European Crises: Treating a Mountain Like a Molehill (McAlvany audio. Info on the Swiss currency devaluation & the euro)
Bank of Canada Keeps Key Rate at 1%, Detects Diminished Need for Increase
Finland May [...]