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’Naked CDS and political nudity – a report
A timely piece of research, this.
Presented without comment, the European Union’s official – though unpublished – account on the nature of the sovereign CDS market, its impact upon bond spreads, both theoretical and empirical,
Guest post: Wanted – a new carbon sheriff
Last month Europe’s carbon trading industry was rocked by a series of cyber thefts — including the stealing of €10m worth of European Union emissions allowances (EUAs), which took place in Prague. Daniel Butler,
From bail-ins to flail-in’ CDS markets
Or adventures in unintended consequences, bank burdensharing edition.
Last week’s bail-in proposal for bank debt, from the European Commission, marks a step-change for capital markets — so it’s no wonder there could be plenty of those known unknowns (or even unknown unknowns) to go along with it.
EFSF 2.0
From Wednesday’s FT:
In parallel, we must ensure that the financial support mechanisms put in place last May are fit for purpose. The effective lending capacity of the current European financial stability facility should be reinforced and the scope of its activity widened.
President Trichet are you watching? [updated]
Because it looks like it might be time to fire up the Securities Markets Programme again.
RTRS-PORTUGUESE/GERMAN 10-YEAR GOVERNMENT BOND YIELD SPREAD WIDENS FURTHER TO 414 BPS, 26 BPS WIDER ON DAY
RTRS-PORTUGUESE/GERMAN 10-YEAR GOVERNMENT BOND YIELD SPREAD HITS WIDEST SINCE DECEMBER 1
RTRS-SPANISH/GERMAN 10-YEAR GOVERNMENT BOND YIELD SPREAD WIDENS 18 BPS TO 258 BPS,
Waiting for a senior bank bond haircut…
Here’s the action in European financial CDS as the market waits for the European Commission to release a consultation paper outlining its plans to haircut senior bank (not sovereign) bondholders. According to Ambrose Evans-Pritchard of the Telegraph this will happen today,
European Commission forecast update
Highlights from the abstract below, with full documentation at the link:
GDP growth
GDP is projected to grow by around 1¾% in 2010-11 and by in 2012. A better than expected performance so far this year underpins the significant upward revision to annual growth in 2010 compared to the spring forecast.
Borderline bank bail-ins in Europe
A discreet publication from the European Commission on Wednesday may have passed much of the financial world by — but we think it deserves a quick look.
The Commission had been expected to let loose its opinions on so-called bank bail-ins this month — perhaps even giving a hint in favour of the measures,
When Anglo Irish bonds are liability managing
This week, the prospect of an Anglo Irish debt ‘liability management’ exercise burst into the market’s consciousness.
Anglo Irish anguish
The term is fixed-income code for what would basically a tender or exchange offer for existing Anglo subordinated debt — about €1.7bn of Lower Tier 2 bonds — which sit further down in the nationalised bank’s capital structure than senior debt.
Ireland’s exteeeeended banking issues
So much, perhaps, for that scary September of bank refinancing.
Reuters reports that Ireland “signalled” on Wednesday, that it’s seeking to extend its guarantee of Irish bank liabilities, started in response to the late 2008 crisis.
Greece gets the cash
At long last — Greece got the first tranche of its €110bn bailout:
Click for the full release.
Greek austerity with the truth
The Greek finance minister is supposed to have set his government a Herculean task of fiscal adjustment — to get his country out of its debt crisis, and away from the risk of default.
So what’s the following comment all about,
[Ireland's Bad Bank] The morning after…
. . . After Ireland’s new bad bank rolled out swingeing haircuts on Tuesday for the troubled loans Allied Irish Bank and Bank of Ireland want to offload on to it, that is.
And after financial regulators added tough new capital requirements for both banks.
Sovereign CDS: Do we see the dust — clearing?
And the war over credit default swaps rages on.
On Thursday, Europe wheeled out out the big guns, with four of the region’s leaders demanding an inquiry into the CDS market.
The leaders of Germany,
How to borrow €1bn without adding to your public debt figures
Something tells us the story of Greece’s €1bn currency swap — and particularly the involvement of a bank everyone loves to hate, Goldman Sachs — is going to run and run.
Therefore we are going to republish a large chunk of the original 2003 story from Risk,
The other European deficit problem
The European Commission’s position on Greece may have been the key focus of market attention on Wednesday, but there was another country that also managed to draw some criticism from Brussels.
That country was Poland:
More EC words, more problems
The European Commission’s just-released review of Greece’s Stability Programme may have approved the country’s plan to cut its deficit, but it did not do so in few words:
Indeed, the review looks to have come in at a whopping word-count of 1,224.
The un-Noticed Greek deficit
The European Commission has just published its review of Greece’s Stability Programme.
Reuters headlines are below:
RTRS-EU COMMISSION SAYS ENDORSES GREEK FISCAL CONSOLIDATION PROGRAM
10:43 03Feb10 RTRS-EU COMMISSION GIVES GREECE UNTIL END-2012 TO CUT BUDGET GAP BELOW 3 PCT/GDP,
How do you say ‘Notice’ in Greek?
Mark Wednesday in your European Sovereign Struggle calendars.
For that’s the day, February 3, that the European Commission is expected to publish its review of Greece’s Stability Programme. EU members are required to submit these programmes to the Commission every January for review,
Allied Irish Banks’ burden-sharing bonus
Burden sharing for European bondholders is something the market has become extremely familiar with in recent months.
So Allied Irish Bank’s announcement on Tuesday morning, that it has agreed to the European Commission’s request that it should not make discretionary coupon payments on its Tier 1 and Tier 2 capital bonds,
Steelie Neelie squares up to Silvio
No one could accuse Neelie Kroes of slipping gently into retirement. In her last months as EU antitrust commissioner Ms Kroes has delivered a slap across the chops to several state-owned banks, and rolled up her sleeves regarding Oracle’s bid for Sun.
Sun shareholders left swinging
At the end of October, FT Alphaville came across some strange goings on in Oracle’s pending $7bn acquisition of Sun Microsystems.
Oracle had withdrawn its Russian antitrust filing, an unexplained move prompting speculation the deal was about to unravel.
Contingent capital comes to pass, with a little help from the EC
And so it began — the Lloyds statement detailing the bank’s plans to raise contingent capital is out.
This is a concept still confusing the market even as it’s gaining increasing prominence with regulators.
Royal Bank hanged, drawn and quartered
So we now have details of the businesses RBS is going to offload to please Brussels, and the revised terms for its involvement in the UK Asset Protection Scheme. Overall, the divestments appear to be very much in line with what the media had been anticipating:
Lloyds, RBS and state aid
The UK’s two part-nationalised banks, Lloyds Banking Group and RBS, are under pressure again on Wednesday morning as the market continues to fret about potential state aid remedies.
Since ING, the Dutch financial services group,