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’BoI refuses to go quietly
Bank of Ireland won’t bow to the inevitable.
Monday after (stock) market hours statement:
The Bank is discussing a number of structures with the State to raise the requisite Core Tier 1 capital by 28 February 2011.
Psst. Have you heard about the EU’s secret committee?
Well, it didn’t come from us (taps side of nose) but apparently the EU has a covert, conspiratorial — rather German — top-secret eurozone reform committee.
From the EU affairs specialist, EurActiv:
Eurogroup – Live
It’s the event of the week — the European finance ministers’ meeting in Brussels.
Tune in and find out if there’s been an agreement on increasing the size of the EFSF, or even allowing it to buy sovereign bonds.
Eurozone semantics: yes, no, jein…
For a nation famed for precision and definitive positions, it might be almost reassuring to know that Germany has a word that combines “yes” (ja) and “no”, (nein) to mean, well, “yes-no”: jein.
But sometimes,
The end of the taxpayer put
Even more on the corporate vs sovereign credit theme, this time from a banking perspective.
RBS has been looking at Commerzbank and its CDS since the EU bail-in proposals were unveiled last week.
We noted before that the price has blown out,
Presenting the Irish bailout bond…
Results from the issuance of the European Union’s first ever AAA-rated collective EFSM bond are in.
And here they are (via the market):
***EU 5YR PRICED – €5BN AT MS+12BPS ***
Issuer………….European
Buiter: ‘European sovereign debt kerfuffle’
Just as New York turns cold, our old friend Willem Buiter goes and warms us right back up.
We posted some fairly bombastic extracts from Buiter’s sovereign debt crisis essay on November 30. And at a Citi roundtable event on Wednesday,
An Irish bailout – barely
Fresh off the wires:
DUBLIN, Dec 15 (Reuters) – Ireland’s parliament voted in favour of an 85 billion euro EU/IMF bailout on Wednesday, paving the way for the IMF to approve its portion of the funds later this week.
The combative Herr Schäuble
It is just as well that the formidable Wolfgang Schäuble is Germany’s finance minister rather than its foreign minister — a role that might need a little more delicacy than the inciendary approach he clearly feels is required in a finance minister’s verbal arsenal.
No, Uncle Sam isn’t bailing Europe out
Either US Treasury officials (or Reuters ledes) are supreme masters of subtlety, or markets are very stupid.
We’re going with the latter.
We want you to carefully note the following wording of this Reuters report:
Over to you Mr President [updated]
Take a bow President Trichet.
That’s quite a short covering rally you’ve triggered. Now comes the difficult bit: ensuring it doesn’t fizzle out.
So what does Mr President need to announce at Thursday’s ECB meeting to make sure the shorts aren’t put on again and the selling of European periphery debt is stopped?
Recent CDS prices from Markit.
The Merkel crash
So what’s really behind the spike in Spanish government bond yields on Monday?
How about this: because of Angela Merkel’s European Stability Mechanism the market is finally being being forced to price in default risk for eurozone countries.
Hello, Sisyphus
Now here’s an interesting Greek coda to the weekend announcement of loans for Ireland.
The Irish loans had strikingly longer terms (seven years) than had been expected based on current EU/IMF lending to Greece (three years).
The morning after the Irish bailout
Monday’s early price action:
New capital requirements for Ireland’s banks [updated]
Another €8bn needed, according to the Central Bank of Ireland to get core Tier One capital up to at least 12 per cent — with the possibility of more to come post the March 2011 stress test.
From the Prudential Capital Assessment Review (PCAR) released on Sunday evening (emphasis ours):
Introducing the European Stability Mechanism
Snip, snip, snip.
Merkel gets her way on burden-sharing.
(emphasis throughout ours)
Statement by the Eurogroup
The recent events have demonstrated that financial distress in one Member State can rapidly threaten macro-financial stability of the EU as a whole through variouscontagion channels.
EU/IMF Irish bailout – the details
Here it is in all its gory detail
But first a few points of interest: there will be NO shortback and sides for senior bondholders; the four year plan has gone (it lasted all of four days); Ireland’s SWF is getting sucked dry,
A de facto nationalisation of the Irish banking sector
The banking team at RBS have produced an excellent note on what Ireland’s quoted banks will look like post-recapitalisation.
And it makes for uncomfortable reading.
In order to bring common Tier 1 equity ratios up to 12 per cent on a Basel III basis as proposed by the EU rescue package,
Irish bailout *fail*
RTRS-IRISH FIVE-YEAR CREDIT DEFAULT SWAPS AT 530 BPS, 25 BPS WIDER ON DAY
And here’s a chart of that CDS movement, via Markit:
PORTUGUESE FIVE-YEAR CREDIT DEFAULT SWAPS AT 460 BPS, 39 BPS WIDER ON DAY – MARKIT
SPANISH FIVE-YEAR CREDIT DEFAULT SWAPS AT 281 BPS,
Irish bailout request accepted [updated]
Statement released by the Eurogroup and ECOFIN Ministers on Sunday evening:
Note: the financial assistance is being financed from European Financial Stabilisation Mechanism (EFSM) and the European Financial Stability Facility (EFSF),
Bailout live
Watch Cowen and Lenihan explain why they are taking IMF/EU cash.
Ireland to take the cash
Here’s Brian Lenihan interview with RTE in which he says Ireland needs a IMF/EU bailout loan — but not a three figure one.
More as we have it. Special cabinet meeting later on Sunday.
To rebuild an Irish banking system, part two
We’ve now well and truly progressed to the question not of when but of how much in bailout loans is needed for Ireland, so…
From a note on Friday, we’d point out the estimate of Barclays Capital’s Antonio Garcia Pascual and Pietro Ghezzi (emphasis ours):
Statement by the Eurogroup on Ireland
It starts pleasantly enough (emphasis ours):
The Eurogroup welcomes the significant efforts of Ireland to deal with the challenges it faces in the budgetary, competitiveness and financial sector areas.
