German and French leaders meet this week to map out a revised plan for the euro as the G8 exposed disagreement on a rescue strategy, reports Bloomberg. The May 23 EU leaders’ summit will see proposals previously rejected by Germany being raised again, reports the FT, which could include empowering the eurozone’s €500bn rescue fund to directly recapitalise faltering European banks and commonly backed eurozone bonds.
Some EU officials have been considering the introduction of a pan-EU plan to guarantee bank customers’ deposits, the WSJ says, citing people familiar with the matter. Such a plan would complement national guarantees already in place and it was unclear how developed the plans were. The high proportion of deposits in Spain, Italy and Portugal that could be withdrawn on demand are feeding concerns of investors and analysts, the report says.
Chinese Premier Wen Jiabao raised hopes for stimulus with remarks on Sunday, says Bloomberg, in which he talked about “putting stabilising growth in a more important position” and didn’t mention inflation in remarks published on Sunday by the official Xinhua News Agency.
Chinese consumers of thermal coal and iron ore are asking traders to defer cargos and – in some cases – defaulting on their contracts, says the FT, citing unnamed executives from two global trading houses.
Samsung Electronics in China expects the country’s technology goods demand will grow by only 7% in 2012, down from 10% last year, the FT reports.
Alibaba and Yahoo have reached a deal that paves the way for Yahoo to fully exit its stake in the Chinese ecommerce company, bringing an end to long-running and often bitter negotiations between the two sides, reports the FT.
The BoE, the FSA and FDIC in the US are working on “resolution plans” if any of seven cross-border banks collapse, the FT reports, and are focusing on ‘bail-in’ measures to force bondholders and equity holders to take losses. The pilot project builds on “living wills” drafted by banks themselves, but goes much farther, with a step-by-step analysis of how each successive move by governments would play out legally and practically on both sides of the Atlantic.
Hedge funds and private equity firms have amassed almost €60bn to buy loans from stricken European banks in coming years as many of the continent’s lenders seek to shrink their way to health, according to a PwC survey, via the FT.
COMMENT AND CURIOS
– The ECB “should immediately announce that in the event of a Greek exit from the eurozone it will stand ready to buy unlimited amounts of the sovereign bonds of countries remaining in the euro” says Poland’s finance minister. (Financial Times)
– Grexit is *not* imminent, says John Dizard. (Financial Times)
– A slow-motion run on European banks is being caused by exchange rate risk concerns, not necessarily by the fear of bank failure, says Gavyn Davies. (Financial Times)
– This week will be the real test for Facebook shares. (Reuters)
– Criticism grows of Chesapeake’s use of “full-cost accounting”. (Wall Street Journal)
– Nasdaq chief ’embarrassed’ over FaceBook IPO delays. (Financial Times)