27 February 2015 - 21:06 pm
Gold may have rallied and euro sold on the rumor
There was talk in the market that Greek bank Piraeus had run out of cash at ATMs. Stratfor may have been behind the talk but a rumor like that can start anywhere.
Reporters in Greece now report that executives at the bank have official denied the rumor and said everything working properly.
On of the things that rallied was gold, climbing up to $1217 from $1210 but it fell back to $1213. The euro also fell to the lows of the day at 1.1176 but has rebounded to 1.1202.
24 February 2015 - 7:08 am
After non-performing assets, it is now the turn of restructured debt packages that have got banks worried.
Debt restructuring packages of 121 companies with loans of over Rs 30,000 crore have failed during the last four years, and banks fear that number is set for a sharp rise in the coming months.
Figures available with the Corporate Debt Restructuring (CDR) cell of banks — considered as the “intensive care unit” for financially troubled corporates — show that CDR packages of 86 companies with loans of Rs 14,000 crore failed in 2013-14. In 2012-13, 12 CDR cases for Rs 4,300 crore and in 2011-12, 9 cases for Rs 3,000 crore failed.
These CDR packages failed — from virtually zero to Rs 30,000 crore in four years — even after banks doled out interest rate cuts, moratorium on repayment and in some cases even a haircut by the lenders. After taking into account the stressed loan cases withdrawn from the CDR mechanism, the total amount involved in unsuccessful restructuring comes to Rs 50,104 crore, says the CDR Cell of banks, created under the RBI’s regulatory framework. >> Read More
25 November 2014 - 19:59 pm
Reserve Bank of India Governor Raghuram Rajan has called for a change in the current mindset where wilful large defaulters are not lionised as a captain of industry, but as a freeloader on the people of this country. While delivering the third Verghese Kurien lecture at the Institute of Rural Management, Anand, on Tuesday, Rajan also said that the sanctity of the debt contract had been continuously eroded in India in recent years by the large borrower.
The reality, he said, was that too many large borrowers saw the lender, typically a bank, as holding not a senior debt claim that overrode all other claims when the borrower got into trouble, but a claim junior to his equity claim. “In India, too many large borrowers insist on their divine right to stay in control despite their unwillingness to put in new money. The firm and its many workers, as well as past bank loans, are the hostages in this game of chicken — the promoter threatens to run the enterprise into the ground unless the government, banks, and regulators make the concessions that are necessary to keep it alive. And if the enterprise regains health, the promoter retains all the upside, forgetting the help he got from the government or the banks – after all, banks should be happy they got some of their money back,” he said.
Pointing out that he did not intend to cast aspersions on the majority of Indian businesspeople who treated creditors fairly, Rajan said he wanted to warn against the uneven sharing of risk and returns in enterprise, against all contractual norms established the world over – where promoters have a class of ‘super’ equity which retained all the upside in good times and very little of the downside in bad times, while creditors, typically public sector banks, held “junior” debt and got none of the fat returns in good times while absorbing much of the losses in bad times. The most obvious reason for this, he said, was that the system protected the large borrower and his divine right to stay in control, rendering the banker helpless vis-a-vis the large and influential promoter.
The former International Monetary Fund chief economist went on to criticise some of the laws, which he termed as draconian, which are meant to be ammunition for banks to recover loans, but in practice failed. “The promoter enjoys riskless capitalism – even in these times of very slow growth, how many large promoters have lost their homes or have had to curb their lifestyles despite offering personal guarantees to lenders?,” the governor asked.
>> Read More
28 October 2014 - 7:31 am
The Indian government had the details of the overseas bank accounts of 75 individuals and entities named in the so-called ‘HSBC Geneva list’ even before Swiss authorities agreed this month to share this information with New Delhi.
The information had been given by HSBC itself following negotiations between the bank and Indian income tax authorities in January 2013. HSBC made the details available earlier this year, before the NDA government came to power.
On October 15, following a meeting in Bern between revenue secretary Shaktikanta Das and the Swiss state secretary for international financial matters, Jacques de Watteville, the countries issued a joint statement that said the “Swiss authorities would assist in obtaining confirmation on the genuineness of bank documents on request by the Indian side”.
The ‘HSBC list’ contains details of accounts held by 628 Indian individuals and entities at the Geneva branch of HSBC’s Swiss subsidiary, HSBC Private Bank. This information — categorised as name, address, account number and balance — was stolen from the bank by a former staffer, Herve Falciani, on a particular day in 2006, and was supplied to India by France in June 2011.
Indian authorities are currently in the process of investigating the HSBC list. According to I-T documents accessed by The Indian Express, assessments are complete in 65 cases, including those decided by the Income Tax Settlement Commission. >> Read More
27 October 2014 - 14:12 pm
Banca Monte dei Paschi di Siena, the bank which started life as a pawnshop serving the underprivileged in the dying days of the Italian renaissance, has slid 15.2 per cent after failing the European Central Bank’s stress test.
The world’s oldest bank was identified on Sunday as having the biggest capital shortfall in the stress test and asset quality review conducted by the European Central Bank which examined the biggest eurozone lenders.
That result heaped fresh woe on Italy’s third-largest bank by assets which has received three state bailouts in the past five years and launched a fresh €5bn capital raising in June. MPS’ shares tumbled to just €0.849.
Overall 25 in the region were deemed wanting by the ECB. Italy was the biggest loser in the test with nine of its banks failing. >> Read More
24 October 2014 - 8:50 am
Global banks will have to show how they can withstand a spike in oil prices, a rise in the US unemployment rate and an increase in risky corporate loans as part of the 2015 Federal Reserve stress tests.
Passing the stress tests and related capital planning review is a top priority for banks, because this determines whether they can pay additional dividends or buy back shares. Companies that fail the test, which is aimed at showing how a bank would deal with a crisis situation, can also take a reputational hit.
Citigroup suffered an embarrassing blow when it failed to pass the last review, and executives are determined not to repeat that mistake in 2015. The US units of HSBC, Royal Bank of Scotland and Santander, which took the tests for the first time last year, also failed.
Fed officials have warned they will continue to raise the bar on expectations for banks, putting additional pressure on them. >> Read More
22 October 2014 - 14:46 pm
Spanish news agency Efe has reported that 11 banks from 6 European countries are looking like failing the stress tests. There are 4 from Greece, 3 from Italy, 2 from Austria and one each possibly from Belgium, Portugal and Cyprus.
None were named and the news was gathered from several sources.
It’s likely that the banks failing are once again smaller regional entities rather than any of the big boys, which would rock markets if they fail the tests. We’ve long maintained that this was going to be the worst kept secret as there’s no way you can lock down every bank and employee in the know from spilling the beans.
Sunday is D-day for the banks as that’s when the results will be made public but banks have been given an idea of the outcome in advance.
Full details from Reuters here
08 October 2014 - 11:55 am
• At 7:00 AM ET, the Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.
• At 2:00 PM, FOMC Minutes for the meeting of September 16-17, 2014.
22 August 2014 - 19:41 pm
Simply put, as Citi noted, unless Fed head Janet Yellen goes full-dovish, risk assets face tremendous downside potential. As ConvergEx’s Nick Colas notes, Yellen receives a “B” grade from financial professionals, fewer than half (49%) of those surveyed approve of the job the Federal Reserve is doing. A clear majority (59%) of respondents describe the Fed as being “behind the curve” with respect to interest rates. Despite better-than-expected data whereever one looks in the US (apart from wages and housing), any hint of seni-dovish, or contingent dovish… or heaven forbid hawkish comments and the massive consensus trade that the Yellen Put has an ever-increasing strike price will fall rapidly by the wayside… though Draghi could come in later and save the day. With S&P so close to 2000, we suspect any hint of word ‘slack’ and algos will run stops and USDJPY will break 104.
Pre-Yellen: S&P Futs 1986, 10Y 2.407%, JPY 103.77, Gold $1278, Oil $93.35
*YELLEN: LABOR MARKET HASN’T FULLY RECOVERED EVEN AMID JOB GAINS
*YELLEN SAYS THERE’S `NO SIMPLE RECIPE’ FOR APPROPRIATE POLICY
*YELLEN: FOMC SHIFTING TO QUESTIONS ON LEVEL OF JOB-MARKET SLACK
*YELLEN SAYS GAUGING LABOR-MKT SLACK NEEDS TO BE `MORE NUANCED’
22 August 2014 - 15:52 pm
The Kansas City Fed’s annual Economic Policy Symposium kicked off on Thursday.
For many, the main event will be the appearance of Federal Reserve Chair Janet Yellen, who will offer opening remarks at 10:00 a.m. ET.
Other heavy hitters at the event include European Central Bank President Mario Draghi and Bank of Japan Governor Haruhiko Kuroda.
Here’s the full schedule via the Kansas City Fed.
Thursday, August 21, 2014
Opening Reception and Dinner
|President and Chief Executive Officer,|
|Federal Reserve Bank of Kansas City|
Friday, August 22, 2014
|Chair:||Peter Blair Henry|
|Dean, Stern School of Business,|
|New York University|
|Board of Governors of the Federal Reserve System|
Churn and the Functioning of Labor Markets
|Authors:||Steven J. Davis|
|University of Chicago|
|University of Maryland|
|Massachusetts Institute of Technology|
|Discussant:||Lisa M. Lynch|
Panel on Demographics
|University of Michigan|
|Ronald D. Lee|
|University of California, Berkeley|
|European Central Bank|
Saturday, August 23, 2014
|Chair:||Christina D. Romer|
|University of California, Berkeley|
Scars From the Crisis
|Author:||Till Marco von Wachter|
|University of California, Los Angeles|
|EDHEC School of Business|
|University of Rochester|
Overview Panel: Labor Markets and Monetary Policy
|Deputy Governor for Monetary Policy,|
|Bank of England|
|Bank of Japan|
|Alexandre Antonio Tombini|
|Central Bank of Brazil|