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’What lurks in Anglo Irish
What with being dead and all, Anglo Irish will probably not have a starring role in Ireland’s fifth attempt at recapitalising banks, due at 4.30pm (Dublin time) this Thursday.
That would be a shame.
Some intra-eurosystem inequality
The heart of Europe’s single currency union lies not in some grandiose parliamentary hall in Brussels, but in a little-known payment system platform with the unimpressive title of, “Target2″.
Just think of two eurozone banks.
Ireland — a double-size banking catastrophe
Commercial insurance payouts for global catastrophes in 2010 = $43bn.
Taxpayer insurance payouts for Irish banking catastrophes from 2008 onwards = $96bn.
A hat-tip to Credit Plumber for the comparison — which is obviously extremely unfair.
Of FARTs and fire sales
As Irish Life & Permanent looks about to complete Ireland’s nationalisation of its entire domestic banking system…
More abbreviation fun on Tuesday with the mooted ECB facility to replace emergency loans from Irish national central banks,
The ‘Banks Under Restructuring’ programme
BURP, for short.
Oops. Excuse us. Manners.
Actually it looks like ‘Facility for Banks Under Restructuring’ is the working title for a European Central Bank plan to advance loans to Ireland’s banks — to replace their reliance on Emergency Liquidity Assistance from the national central bank.
Allied Irish coupons: still alive
Some palaver in the market on Tuesday that one or the other of a) Ireland or b) Allied Irish Banks had missed a coupon payment…
It’s not true. On either count.
But there’s an interesting anatomy to the rumour.
Irish mortgages everywhere – but not a one to collateralise with?
So. This is an interesting chart:
Those are covered bond details for AIB Mortgage Bank, part of troubled Irish bank, AIB. Focus for a second on the two overcollateralisation figures — which are basically the degree to which the bank’s covered bonds are overstuffed with assets.
Europe’s secret liquidity goes berzerk?
We already knew Irish banks’ reliance on emergency lending is higher than ever — but how high can it go?:
While the Irish banks’ dependence on ECB funding dropped by another €9bn in February, their use of the Irish central bank’s Emergency Liquidity Assistance facility is estimated to have risen by nearly €19bn (currently standing at €67bn),
Irish secret liquidity, forever
Irish bank borrowings from Europe’s central bank in February — down €10bn, to €116bn (after much collateral swap shenanigans).
Irish bank borrowings from their own central bank, with collateral unacceptable at the ECB — up €20bn,
This is not normal ECB tightening
In which ‘strong vigilance’ = ‘token gesture’.
Three charts on the European Central Bank and the euro periphery, from Credit Suisse’s global equities team on Monday:
Irish bank bonds — handy haircut hit list
‘In the interests of providing public information…’ Ireland’s central bank just released details on outstanding senior and subordinated debt issued by Irish banks. You know, the stuff in the bail-in firing line (notably the bonds in the third column of this chart):
Unlucky Corsair Finance
We’ve heard of CDOs swashbuckling with risk, but this is just silly…
On Tuesday, Moody’s junked €200m of notes of Corsair Finance (Ireland) No. 2 Limited, a collateralised debt obligation referencing several corporate entities.
It’s an Irish bank eat Irish bank world
A Monday morning reminder to Ireland’s new government of a not so small banking problem, this.
Overnight borrowings from the ECB jumped (again) on Monday — this time to €17.115bn. And this time, the dynamic in Irish banking that has driven this newest spike is fairly clear,
European liquidity and Irish handcuffs
Even with Ireland’s Fine Gael party leading in the polls — the market is pricing in a one in three chance of senior bank debt investors taking a haircut.
Why?
European regulators seem firmly against the idea,
Your cut-and-paste guide to the Irish elections
Voting booths are open and Ireland’s snap general election is underway on Friday. Here’s a handy table of the parties’ financial policies from Morgan Stanley:
Early indicators had Fine Gael in front with 38 per cent of the vote.
Ireland’s (stylised) sovereign-bank loop
How to separate the fortunes of a nation from those of its failed banks has become one of the biggest questions to come out of the recent financial crisis.
And no more so than in Ireland — which has seen its off- and on-balance sheet liabilities rise with almost every added layer of bank bailouts and financial guarantees.
The Irish banking angle in muni bonds
This is a bit of a curio given the muni market’s wider problems and controversies over investor disclosures, but it’s perhaps a lesson in microcosm. From Fitch on Friday:
Fitch Places Muni Bonds on Watch Negative Based on 2/18/2011 Placement of Allied Irish Bank on RWN
Fitch Ratings-New York-18 February 2011:
Clues to the eurozone’s €15.8bn fat finger
Fresh from the European Central Bank on Friday morning, some clues to the mystery of Thursday’s €15.8bn ‘fat finger’ tapping of eurozone liquidity.
Headlines off of Bloomberg:
*ECB SAYS BANKS BORROWED
Armageddon Bank
Amagerbanken is a small bank in Denmark — but its failure could end up having big consequences for investors in bank debt. It might end up being a relatively rare instance of a bank’s senior unsecured investors (and depositors) taking a hit.
Fir Tree Capital’s (Anglo Irish) beef
Investors in a distressed Irish bank are suing the company for merging with …
… another distressed Irish bank.
US hedge fund Fir Tree Capital, which invested in $200m worth of Anglo Irish debt back in 2005,
What Ireland’s secret liquidity costs
By this point, we know a few things about how Irish banks are getting emergency liquidity assistance from their national central bank (even though officially, this is all rather hush hush).
The ‘penalty’ rates on this assistance,
World’s best bank (2006 vintage)
It has long been known that consulting firm Oliver Wyman crowned Anglo Irish the world’s best bank in 2006 — just when Anglo was actually… well, you know the story.
Sadly, the report that bestowed this fateful distinction has (quite unaccountably!) vanished from the Oliver Wyman corporate site.
Where did Ireland’s secret liquidity go?
Eonia went a bit doolally at the end of January.
Many blamed a lack of front-loading in bank liquidity management as they watched Europe’s key overnight lending rate drift above one per cent for the first time since June 2009.
Irish bank bond haircuts by the numbers
With talk of haircuts for holders of senior Irish bank bonds swirling among politicians and the market, here’s a number-laden note from Goodbody Stockbrokers.
The Irish house has crunched some bond-specific figures in a blockbuster piece of research sussing-out Ireland’s debt sustainability.
Anglo Irish, 2006-2011, in memoriam
Presenting Anglo Irish in 2006 (‘Managing for growth in a complex environment’):
Record funding growth…
More than 350 interbank relationships…
No surprises on asset quality…
Ireland’s secret liquidity is unbelievably cheap
This, from the Irish Independent, is very interesting:
IRISH banks are paying an interest rate of less than 3pc on the €51bn of ‘emergency liquidity assistance’ (ELA) that has been sanctioned for them by the Central Bank of Ireland.
The missing bits from Merrill’s Ireland note
Last week, Michael Lewis brought you his take on Ireland, a Vanity Fair epic on the nation’s real estate and banking bust. He also brought us the story of Philip Ingram, a zoology student and former Merrill Lynch banking analyst.
Merrill’s scrubbed Ireland note
It was here. But Merrill wanted it taken down. Bye By, Philip Ingram’s research.
Merrill’s missing Ireland note
One of the most damning bits of Michael Lewis’ “When Irish eyes are crying” article concerns a zoology student, ‘business relationships’ and a missing Merrill Lynch note.
Here’s the extract via Barry Ritholtz over at Big Picture:
Gaelic TALF, and other bizarre Irish bank fixes
Amazing stuff on Friday from Fine Gael, the party that’s likely to take power in Ireland’s elections later this month, on their policies for fixing Ireland’s bailed-out banks.
Previously, Fine Gael have blown hot and cold on whether to burn Irish banks’ senior bondholders (the subordinated debt is already toast).