25 October 2014 - 21:52 pm
Some 25 eurozone banks have failed a health check by the European Central Bank, reports claimed Saturday, citing leaked documents.
Nearly one in five of the 130 banks surveyed failed the stress test, the Wall Street Journal and the Daily Telegraph said, ahead of the publication of the official results by the ECB on Sunday.
The unprecedented health check of eurozone banks comes before the ECB assumes the role of the bloc’s banking supervisor next month.
The Frankfurt-based institution takes on its new watchdog role on November 4. It hopes that a “comprehensive assessment” — made up of a so-called asset quality reviews and a “stress test” — will uncover any potentially nasty surprises beforehand.
Citing a draft memo seen by Bloomberg, the Telegraph report said only 10 of the 25 banks which failed the stress tests would be told to raise more cash.
The failing banks were thought to be in Ireland, Italy, Greece and Austria and will have until November 10 to fill in capital shortfalls, the paper reported.
The banks were already given a preliminary indication of their outcome on Thursday.
One of the failing banks is being to be the Austrian lender Volksbanken AG, which the country’s Finance Minister Hans Joerg Schelling said was no surprise, as it had already said it would wind itself down.
An ECB spokesman said its results had not yet been finalised and dismissed reports in the meantime as “speculation”.
“The results will not be final until they are considered by the Governing Council of the bank on Sunday, after which they will be published. Until that time, any media reports on the outcome of the tests are by their nature highly speculative,” he said.
25 October 2014 - 18:52 pm
Above is Weekly Chart of SHANGHAI COMPOSITE
Watch :2291 & 2266 as Support & Down Targets.
Now Break & close below 2266 for 3 Consecutive Days will create More panic
101% More Details to our Subscribers ,Updated at 18:50/25th Oct/Baroda/India
25 October 2014 - 17:30 pm
Reuters reports that the ECB is considering buying corporate bonds as early as Q1 (January) next year, with the decision to be taken in December. Mr Draghi has admitted that the only real option left for the ECB is to increase the size of its balance sheet and such a move makes sense. No doubt, the Bundesbank and German politicians will oppose such a policy, though without this and/or similar actions, the economic climate in the Eurozone (EZ) is set to worsen materially. Mr Weidmann of the Bundesbank states that the risk of deflation in the EZ remains low, which I have to say is optimistic. To date Draghi has succeeded in increasing monetary accommodation, despite the opposition of the Bundesbank and I expect he will continue to do so. However, a January start date seems optimistic in my view, as the ECB will want to assess the impact of its other programmes which have just started. The move will be Euro negative, though clearly positive for EZ equity and corporate bond markets. Mr Draghi will be quizzed on this matter at the next ECB meeting in November.
Whilst France once again disappointed, I must admit that the preliminary October EZ PMI reading came in better than I had expected, in particular for Germany. However, the more forward looking components suggests that the region is “teetering on the verge of another downturn”, according to Markit, the producers of the index. Businesses are reducing prices and employment levels to cut costs and boost sales.
Chinese Q3 GDP came in at +7.3%, despite a significant rise in fiscal and monetary stimulus. That’s the dilemma facing the Chinese authorities, who clearly want to avoid a further stimulus programme, though they will “encourage” the Central Bank, the PBoC to provide monetary stimulus.
There is growing evidence of portfolio outflows out of the EZ and into the US/US$. With negative yields in the EZ and particularly low inflation, the Euro is increasingly being used as a funding currency for carry trades. Furthermore, Central Banks globally appear to be reducing their Euro holdings. I remain particularly bearish on the Euro and EZ markets and favour the US$ and US markets. The UK remains the best economy in Europe, though the FTSE 100 is heavily weighted in the energy and mining sector, which will adversely impact the index, if, as I believe, commodity prices remain weak. However, I continue to believe that the Bank of England will be the 1st major central bank to raise rates and, as a result, believe that Sterling will appreciate, in particular against the Euro. >> Read More
25 October 2014 - 17:26 pm
Anil Ambani may be feeling a little smug. Barely two weeks after India’s election in May, the canny billionaire rushed to raise around $800m in equity for Reliance Communications, his heavily indebted mobile telecoms operation. Always a shrewd operator, he sensed that India’s post-election optimism might not last.
Rival industrialists such as billionaire Gautam Adani also began readying fundraising plans, hoping to patch up their balance sheets, which had been damaged in the country’s recent downturn. Few, however, have yet managed to follow Mr Ambani’s lead.
Now, with foreign investors growing nervous about the global economy, the risk is that corporate India may already have missed its chance to raise capital – and, with it, an opportunity to kick off a virtuous cycle of debt repayment and deleveraging. “The idea that capital markets are going to bail out all these overleveraged companies, that moment is probably now gone,” says the head of one global investment bank in Mumbai.
At one level, such gloom seems odd. India’s prospects are improving. Prime Minister Narendra Modi appears to have rediscovered his zeal, following victories in regional elections last weekend. His government has unveiled new reforms in recent days, including ending diesel subsidies and raising gas prices. Business leaders are enthused. Economic data are moving in the right direction too.
But global economic difficulties are also real enough, making fund managers less likely to take risky bets in emerging economies. India’s industrial and banking sectors remain badly undercapitalised. Major conglomerates – such as London-listed Vedanta and Mr Ambani’s wider Reliance Group – carry heavy debts. Many smaller infrastructure and power businesses are barely solvent. Indian banks are also struggling with bad loans, and must raise $200bn by 2018, according to the rating agency Fitch.
All of this matters because India’s economic fortunes are unlikely to recover until these industrial groups increase their spending, which has collapsed over recent years. Even an optimist like Arundhati Bhattacharya, chairman of State Bank of India, says such a recovery is unlikely for at least a year. If investors get spooked, and equity markets close up, it will take longer still. >> Read More
25 October 2014 - 15:45 pm
* 41-year-old lawyer found dead on Oct. 20 -WSJ
* Calogero Gambino worked for German bank for 11 years
* Gambino negotiated on Libor, currency probes
BERLIN, Oct 25 (Reuters) – Calogero Gambino, a senior Deutsche Bank regulatory lawyer, has been found dead in New York in what appears to have been a suicide, the Wall Street Journal reported on Saturday, citing New York City officials and other sources.
The 41-year-old man was found early on Oct. 20 hanging by the neck from a stairway banister, the newspaper said.
Gambino, an associate general counsel and a managing director who worked for the German bank for 11 years, was found by his wife and pronounced dead by medical practitioners at the scene, according to the paper. >> Read More
25 October 2014 - 15:34 pm