Posts tagged 'Vienna Initiative'

Bondholders, a two-pack, and “all necessary measures”

The EU’s Council and Parliament agreed on the text for two-pack laws on “enhanced surveillance” of sovereign bailouts on Thursday. It should be on the books soon.

So, if what happened in Greece last year was “exceptional and unique”… Read more

…And Justice for All (in emerging Europe)

CEE Banker: If everybody agrees I’m innocent, how come I’m going BACK to the market jailhouse? The ECB is guilty of failing to shore-up monetary conditions in the CEE!
European policy-maker: You are out of order! We have provided a liquidity backstop for eurozone banks that operate in the region!
CEE : You’re out of order! You’re out of order! The whole ECB and banking framework is out of order!

It’s the 2011 redux of an old classic: A CEE central banker, outraged by west Europe’s seeming disregard for the region, is forced to endure a trial by ordeal — eurozone stresses –- and battles valiantly for monetary justice. Read more

The French proposal

You should all now be familiar with the EU ‘Brady bonds’ plan for Greece.

But what are the pros and cons of this French-led initiative? Read more

Greek covered bonds to the rescue?

A counter-intuitive headline, to be sure, given that Greece has just one publicly outstanding covered bond left (but over €12bn of ‘retained’ covered bonds used as fodder for central bank liquidity).

Hidden in the details of Greece’s planned privatisation fund are a few interesting tidbits. For a start, it looks like the fund will be able to issue bonds, possibly with a Greek government guarantee. It could then use proceeds from issuance to buy back debt, offer exchanges or set-up other guarantees. Read more

Europe’s big box-ticking exercise

Interesting Q&A over at UBS earlier this week, concerning a voluntary roll-over of Greek bonds:

Question [from an emotional anonymous]: … this business of a voluntary versus a mandatory default seems to me kind of silly. Why are the authorities even talking about a three-year voluntary extension? That’s going to be called a default event. All these financial institutions in Europe that think they’re protected from this are not going to get payouts, and they’re going to get bonds that are lower quality; that have lower rating. So I don’t understand why they’re even talking about a seven-year versus a three-year. If they were talking about a zero-year or a 10,000-year, I would understand that, that’s at least logical, but there’s really… I don’t see the difference there. I mean, I don’t think anyone sees the difference between an orderly and disorderly. The only way to have an orderly is you close markets for a week and you announce it today and it’s all done at the end of the week, but… So my second question is, why are they even talking about a three-year versus a sevenyear, and why is a three-year good? It seems to me just as problematic as a seven-year. Read more

Notes from Athens

That’s one (very Acropolis Now) view from Greece, recently. (Photo via GreekSky). Read more

+++Vienna Plus+++

Introducing the latest in eurozone debt crisis terminology. ‘Vienna Plus’ — brought to you by Fitch.

The FT reports on Monday that European ministers were expected to back a plan, supported by the European Central Bank, dubbed ‘Vienna Plus.’ It’s basically the 2009 Vienna Initiative on steroids — holders of Greek bonds coming due in the next three years will not only be encouraged to maintain their exposures but also to buy new, longer maturing-bonds. Read more

Dear ECB — get lost, yours, Wolfgang

Written in a week when the European Central Bank made its strongest attack yet on burning Greek bondholders…

Via Reuters — the full text of a letter from Wolfgang Schaeuble, German finance minister, to ECB, IMF and eurozone officials on restructuring Greek debt: Read more

Bis the burdensharing – new Greek exposure numbers

Something new from the Bank for International Settlements to mull over this Monday morning.

The BIS has released its Quarterly Review — and with it those infamous foreign claims numbers. Read more

The Vienna Initiative is already here

Bet you didn’t know that, huh?

Spotted in the Eurogroup’s May 16 aid plan for Portugal — a little bit of bank cooperation: Read more

Ratings pain in a Greek reprofiling/rollover

And rolling over Greek bonds (by reinvesting maturing ones into brand-new issuance) is, in terms of ratings, probably on more of a knife-edge than you’d think.

‘Vienna Initiative-style rollover’ is slowly taking over from ‘reprofiling’ as the solution to Greek debt maturing 2012-13. In particular the European Central Bank has started to support it (a long time after it was first mooted…). It’s not so surprising a decision in ratings terms alone actually. Read more

What lies in Greek bank subsidiaries

We all remember the Vienna Initiative, right?

European banks promised to capitalise subsidiaries in emerging Europe in 2009. Governments didn’t collapse from bank runs. It turned out, in general, not bad at keeping some rubbish balance sheets ticking over. Read more