The 6am Cut London | FT Alphaville

The 6am Cut London

Spain is planning a state bail-out of Bankia, the country’s third biggest bank by assets, in a move likely to involve the injection of billions of euros of public money into the troubled lender, the FT reports. Soon after the news broke, Rodrigo Rato, Bankia’s executive chairman and a former International Monetary Fund managing director, resigned from the bank. Local press reports suggest up to €10bn could be injected, says the WSJ.

Greece is bracing for a repeat general election, reports the FT. Technocrat premier Lucas Papademos will leave office next week, making way for a caretaker administration.  Decision-making on further reforms, including finalising a new €11.5bn medium-term austerity package, will be stalled until a new administration is in place. The stalemate puts at risk the timetable for disbursement of Greece’s next loan tranche from its second €174bn bailout.

Morgan Stanley dramatically increased its estimate of the amount of additional collateral it would have to post to its derivatives trading partners if rating agencies lower its credit ratings, reports the FT. The bank on Monday estimated it would have to cough up an extra $7.2bn of securities and other collateral in the event its ratings were changed by S&P’s and Moody’s to triple B and Baa2 respectively. That is a more than 50 per cent higher than it’s last estimate of $4.7bn.

Barclays is launching a US online savings bankreports the WSJ, a move which the bank’s executives say is designed to improve the bank’s ability to finance its American credit-card business without relying entirely on volatile wholesale markets.

Yahoo’s board is investigating how its chief executive’s academic credentials were misstated in company regulatory filings, the WSJ reports, citing people familiar with the situation who said the board met on Sunday and Monday and created a three-person committee to investigate the matter, and is hiring an outside law firm to help oversee it.

Investors managed to ask just five questions at the first event in Facebook’s pre-IPO roadshowreports Reuters. Mark Zuckerberg took questions including one about the $1bn Instagram purchase, which he said was discussed at length between management at several meetings. (And yes, he wore a hoodie…)

David Cameron will say there can be “no going back” from the deficit reduction programme, in a speech today, despite the anti-austerity votes in France and Greece, says the FT.

Iran is accepting renminbi as payment for its oil, and spending the proceeds on goods and services from China, the FT reports.

COMMENT AND CURIOS

- Shipping companies are hiring guards rather than speeding through pirate-ridden waters. To save fuel. (Financial Times)

- Out of work and with MF Global on your resume. (Wall Street Journal)

- A historic expulsion: Al-Jazeera English China correspondent leaves Beijing, bureau to close. (New York Times)

- “Wall Street should have provided reality checks to the shale gas people; instead, they just provided cashier’s cheques.” (Financial Times)

- Growth is not a policy but an outcome, says Jeffrey Sachs. (Financial Times)

OVERNIGHT MARKETS: SLIGHTLY HIGHER

Asian stocks rose after reaching six-month lows this week, boosted by corporate earnings and German manufacturing data. [More]