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’Interventions and bank queues in Eastern Europe
Reuters is reporting that Poland’s central bank stepped into the spot market for the fourth time in less than three months on Wednesday to help support the zloty versus the euro, which was once again nearing levels last seen in 2009.
Greek lessons from John Major, Latvia and Ireland
So, bondholders (if they “agree”) will give Greece more of a fighting chance to tackle its debt burden. But Greece will also have to pull its own weight.
Without its own currency, what is the best course of action? John Major,
Sovereigns of fortune (a debtor’s prison break)
In 2008-2009, a sovereign crack commando unit was sent to debtor’s prison by a bond vigilante court for a crime they didn’t commit.
(Well, actually, private-sector balance sheet losses, exchange rate collapse,
When Latvian interbank rates trade through Euribor
Here’s an interesting datapoint unearthed up by BNP Paribas’ emerging markets deak on Monday.
The Latvian interbank rate — Rigibor — is trading through Euribor for the first time in four years…
…
Norway doesn’t need no stinkin’ stress tests
The European Union’s banking stress tests cover 91 banks in 20 countries.
Seven of those financials are Nordic — but none of them are Norwegian.
Norway is of course, not a member of the EU, but it keeps close ties,
Deutsche Bank, Latvian bridges and EVFs
Risk — the magazine that first reported the story of Goldman’s Trojan currency swaps — has done some digging into how the Latvian capital of Riga managed to “lay their hands on spending money without reporting it as debt”:
Where’s the Greek CΣΣ contagion?
FT Alphaville mentioned on Monday that the CDS market did not appear to be implying much of a contagion-effect for Central and Eastern Europe in connection with troubles in the Hellenic Republic.
And having on Thursday noted the widening spread between Greek government bonds and German bunds,
Greece default or no?
Does the market believe Greece when it says there’s “absolutely” no risk the country will default on its debt?
The answer, perhaps surprisingly, seems to be (sort of) yes. At least in the case of the CDS market.
Latvian house prices fall 59.7% in Q3 (y/y)
The Global Property Guide’s quarterly house price report was published on Wednesday offering some sobering statistics on global real-estate prices in the third quarter.
To wit, the fact that “price falls in several countries have been much larger than house price rises anywhere and include unprecedentedly severe falls in Latvia (-59.7% year to date),
Latvia intervention watch
FT Alphaville is (as ever) on Latvian currency intervention and devaluation watch, this Monday morning.
Last week, the Latvian government agreed to cut its budget deficit — to help stave off a full-blown currency devaluation,
CDS report: The week in perspective
Markit’s Gavan Nolan wrote this CDS report
A sense of foreboding enveloped the credit markets last week. A plethora of economic indicators – leading and lagging – gave investors cause to question the V-shaped recovery being priced into credit spreads.
On the matter of renewing confidence in the Latvian economy
One thing the financial crisis has taught the Western world is that when it comes to defending your reputation, the CEE states are masters of their game.
Who can forget their unity over evil currency speculators?
Or,
A CEE stress snapshot
A quick overview of the situation facing CEE on Wednesday:
Latvia
- The government’s latest debt auction fell flat on Wednesday, with investors picking up only 2.04m of the 24m lats worth of debt on offer.
Latvia preparing for devaluation?
On Tuesday, we reported that Latvia’s government was taking legislative steps to change the sums lenders could collect on outstanding mortgages to better reflect the current market value of the properties.
Defcon Latvia, Swedish krona edition
Another day, another Latvia development.
Although, as Danske Bank note, it’s getting harder to determine what’s really going on the ground. From their report on Tuesday:
Most recently, it seems Latvia’s prime minister has decided to change the sums lenders can collect on outstanding mortgages to better reflect the current market value of the properties.
Defcon Latvia, again
Economic troubles have been bubbling away in Latvia for months, but the country’s government has so far stood strong in the face of rising pressure to devalue the currency to help mitigate some of the negative economic effects.
Another Latvia wobble
Latvia’s parliament failed to pass a critical property tax hike plan on Thursday which was closely connected to conditions agreed with the European Union and International Monetary Fund for its €7.5bn bailout.
Moody’s stands by Latvia, for now
Moody’s said on Thursday it was ready to stand by its investment-grade rating of Latvia, but only while international financial bodies continued to provide extraordinary financial support to the country.
Latvia’s not for turning
The governor of the Bank of Latvia, Ilmars Rimsevics, took a heroic stand on CNBC Wednesday morning, rubbishing all talk of potential devaluation and accusing anyone of having suggested as much of being hugely misguided on the subject of Latvia,
Swedbank sweats
Things may be getting better around the world, but as can be seen in Swedish lender Swedbank’s results, loan impairments originating from the Baltic region are still growing meteorically:
Indeed,
S&P cuts Baltic states’ ratings
S&P on Monday cut Latvia’s credit rating for the fourth time in a year as the country revealed its economy shrank by a fifth in the second quarter. The downgrade highlights the plight of the Baltic region amid the EU’s deepest recession.
More pain for Latvia: shrinking GDP and a sovereign downgrade
It’s only Monday, but Latvia is already having a poor week.
First up: a whopping decline in GDP. The country’s gross domestic product shrank by 19.6 per cent in the second quarter compared to the same period a year ago,
A quick turn of events in Latvia
There was joy on Sunday night in Latvia as reports suggested the government had — after a week-long stalemate — finally agreed upon terms for the country’s second instalment of IMF financing.
But that wasn’t to last long. As Reuters reported on Monday:
Latvian banks face reserve shortfall
Here’s an interesting story from Reuters on Latvian banks (our emphasis):
LONDON, July 23 (Reuters) – Banks in Latvia have fallen short of the central bank’s reserve requirements since late June, with the daily shortfall hitting as much as 234 million lats ($473.2 million),
Latvia jitters creeping back
Latvia is back in the headlines as talks between the government and the IMF over its second loan instalment continue to flounder over differing budgetary views.
The analyst community is now interpreting the deadlock as yet another possible chink in the armour of Latvia’s euro-peg defence.
Trouble at Parex?
(H/T to Edward Hugh /A fistful of euros)
It seems the following little press release from Latvia’s Parex Banka went mostly unnoticed by the Western press last Friday. Parex, with assets of 3.1bn lats ($5.6bn),
Don’t bite the hand that feeds, Latvia
As talks between Latvia and the IMF over the fund’s second instalment of aid to the country slog through to their second extended day, Danske Bank offers the following piece of advice to Latvian Economics Minister Artis Kampars who let loose on Latvian TV this week with the following outburst:
EU-IMF breakdown over Latvia?
The IMF’s mission to Latvia should have finished last Friday. But with no agreement on the international body’s second instalment of aid yet, many are beginning to question the very survivability of the current international lender model in emerging Europe.
D-day in Latvia (updated)
Latvia watchers will be awaiting the end of the IMF’s mission to Baltic country on Friday with trepidation.
We already know the talks have been difficult. And while Latvia technically can survive without receiving the second tranche of IMF aid being discussed,