Showing posts with label bail out. Show all posts

Thursday, March 16, 2023

16 March 2023

'What the f--- happened?': Shocked Dutch farmers' protest party celebrate surprise win

Farmers-Citizen Movement is projected to become the equal largest party in the senate, in a blow to Mark Rutte's four-party coalition

by James Crisp, Telegraph

Caroline van der Plas’s Farmers-Citizen Movement is projected to win 15 seats in the senate, from none before the vote: Credit: Sem van der Wal/EPA-EFE/Shutterstock

A farmers' protest party angered by new green laws triumphed in shock Dutch election results, prompting its leader to ask: “People, what the f--- happened?”

Caroline van der Plas’s Farmers-Citizen Movement (BBB) is projected to become the equal largest party in the senate, taking 15 seats from none before the vote.

The Left-wing GroenLinks/PvdA is also expected to win 15 seats, in the wake of months of turbulent farmer protests against government plans to cut nitrogen emissions.

Mark Rutte, the centre-Right Dutch prime minister, insisted his coalition government would survive, after its four member parties lost eight of their combined 32 seats in the 75-seat senate ... Continue reading >>>

'Bailout or Bust'? European Bank Risk Rises As Credit Suisse Stock Tumbles After €50bn Bung

Yesterday we reported the first stage in the inevitable collapse of Swiss banking giant Credit Suisse. Last Friday saw the total failure of the Silicon Valley Bank, the 16th biggest bank in the United States. The biggest bank failure since the 2008 financial crisis. And according to the financial markets news feeds we see, this could be just the start of something much bigger.

Overnight the Swiss National Bank bunged €50 billion plus some small change in fresh liquidity to the collapsing retail bank Credit Suisse. And even that was not enough to prevent collapse as CS share values have continued to tumble on European, American and far eastern stock markets today. And in the USA where the crisis began last week with the collapse of Silicon Valley Bank on Friday and three other bankers went bust in the days that followed, worries about the stability of the banking system continue to grow.

By Sunday, the Silvergate Bank and Signature Bank had joined SVB in full collapse. All three are now safely under Federal Deposit Insurance Corporation (FDIC) control.

The FDIC has taken the unusual step of fully guaranteeing all deposits kept with the SVB – meaning the federal government will give taxpayer money out to compensate every SVB customer.

But the damage didn’t stop there. Naturally, this put pressure on other regional banks, with two more – First Republic Bank and PacWest Bank – coming close to collapsing themselves, following mini-runs. Neither is yet out of trouble.

The 's activity in the financial markets saw Wall Street’s 4 biggest banks lose over 55 billion dollars in value. Bank stocks around the world are sliding in value.

As of this morning Credit Suisse’s stock is at an all-time low, sparking a sell-off of stocks all over the world.

Yet while fears for the solvency of other EU banks grew and caused further panic throughout the finance sector and among corporate businesses which run on debt and fear their credit cards may be cancelled at any moment, European Central Bank chief Christine Lagarde announced a 50bps (half a percentage point,) increase in the European default lender's base rate. Required to explain the move at a time when Credit Suisse is on the verge of collapse and every incremental rate hike by the ECB makes keeping deposits at the bank that much more difficult, Legarde explained: "Inflation is projected to remain too high for too long", therefore the Governing Council today "decided to increase the three key ECB interest rates by 50 basis points, in line with its determination to ensure the timely return of inflation to the 2% medium-term target."

ECB press releases also stated "the elevated level of uncertainty reinforces the importance of a data-dependent approach to the Governing Council’s policy rate decisions, which will be determined by its assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation, and the strength of monetary policy transmission."

That said, the ECB was quick to note that "the Governing Council is monitoring current market tensions closely and stands ready to respond as necessary to preserve price stability and financial stability in the euro area."

It also said that "the euro area banking sector is resilient, with strong capital and liquidity positions" and added that "the ECB’s policy toolkit is fully equipped to provide liquidity support to the euro area financial system if needed and to preserve the smooth transmission of monetary policy."

Ukrainian Official Says Kyiv Doesn’t Have the Resources for a Counteroffensive

by Dave de Camp, Anti-War.com

A senior Ukrainian government official told The Washington Post that Kyiv doesn’t have the resources to pull off a big counteroffensive in the coming months as Ukraine is lacking skilled troops, munitions, and other equipment.

“If you have more resources, you more actively attack,” said the official, who spoke to the Post on the condition of anonymity. “If you have fewer resources, you defend more. We’re going to defend. That’s why if you ask me personally, I don’t believe in a big counteroffensive for us. I’d like to believe in it, but I’m looking at the resources and asking, ‘With what?’ Maybe we’ll have some localized breakthroughs.”

The official said Ukraine doesn’t have “the people or weapons” to pull off a counteroffensive. “And you know the ratio: When you’re on the offensive, you lose twice or three times as many people. We can’t afford to lose that many people,” the official said.

The Post also spoke with a Ukrainian battalion commander who went by the name of Kupol and detailed the grim situation on the frontlines. Kupol said his battalion previously withdrew from the town of Soledar, which is near the eastern city of Bakhmut, and came under Russian control in January. ... Continue reading >>>

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Wednesday, December 21, 2016

European Finance crisis: As Italian banks beg for bailout the infection spreads to Spain.

by Phil T Looker

Italy teeters on the brink again (Image source: Still from The Italian Job, Daily Mail)

Total chaos reigns in European banking stocks this morning as Italian bank Monte Paschi became insolvent when a private sector bailout plan failed. Monte Paschi shates and bonds crashed in European stock markets, the Italian Stock Market was in turmoil and the Italian crisis spread to Spanish banks are also being hit following a European Court ruling on mortgage fraud went against them.

On Monday night, Italy’s finance minister Pier Carlo Padoan confirmed Italy is preparing a €20bn rescue fund for MPS and other weak lenders as the chances of a successful €5bn private recapitalisation of the Siena-based bank recede.

By the evening of Thursday at the latest, it should be clear whether MPS, which was founded in 1472, will have been rescued by the private sector via a €4.5bn debt-for-equity swap and funds from anchor investors including the Qatar Investment Authority. As of Monday only €200m had been committed to the swap, suggesting the chances of pulling off the rescue are slim, said people close to the deal.

MPS’s debt-for-equity swap will close at 2pm Italian time on Wednesday. If it goes badly MPS could already ask the government to step in, said one Italian official.

According to an Italian official only about €2bn of the €20bn will be used for liquidity guarantees, and the rest for recapitalisations and for compensating some retail bondholders. Other banks will be rescued on a case-by-case basis over the coming months now that Italy has a precedent with which to defend against EU bullying. The €20bn rescue fund will abide by EU rules on so-called burden-sharing, which force losses on junior bondholders (small investors, in other words the neo - Fascist EU is protecting the big players again. Benito Mussolini would have been proud.

Italy’s banks currently have one of the highest toxic debt ratios in Europe at 16.4 per cent of total credit outstanding, more than three times the European average of 5.4 per cent, according to Moody’s.

The nationalization, of Italy's three largest banks seems imminent following a Reuters report that the ongoing, JP Morgan-led attempt to put together a private sector bailout of Monte Paschi had failed.

According to Reuters, Qatar's sovereign wealth fund, long considered as the most likely anchor investor with a €1 billion allocation in any rescue plan cash call, decided it is unwilling to invest in the Italian bank, meanwhile Monte Paschi has been unable to find a replacement investor willing to put money in its privately funded rescue plan, less than 24 hours before the offer ends.

As a result, the bank's share issue, which closes at 2 p.m. (1300 GMT) on Thursday, has drawn very little interest from investors.

The bank now needs to raise €5 billion by the end of this month to avert being wound up. The Italian government, which earlier today was given permission by the European Central Bank to issue €20 billion in public debt to use for bank bailout purposes, is expected to step in this week and nationalize the bank.

The approval came after the ECB first refused to extend the deadline for a €5bn recapitalisation of Monte Paschi before the end of the year and fears mounted the bank’s liquidity levels were becoming critical. MPS has lost €14bn, or 11 per cent of its total deposits, from January to September 2016 and warned its liquid reserves would fall under the required level should it suffer another €10bn of deposit outflows under a “stress” scenario calculated by the ECB. That news triggered another rush to withdraw deposits and sent the stock plunging to record lows, shortly before the government agreed that taxpayers would shoulder the burden of the insolvent bank's debts.

Other banks expected to benefit from Italy's state aid in addition to Monte Paschi include Veneto Banca, Popolare Vicenza, Cassa di Cesena, Cassa di Rimini and Cassa di San Miniato.

While economic confidence in the USA is at record levels following the election of Donald Trump, and in the UK, post Brexit, the economy is booming (the pound is still looking weak against the dollar because both have surged against other currencies, particularly the Euro) but elsewhere https://www.bloomberg.com/news/articles/2016-12-21/spanish-banks-lose-eu-case-over-mortgage-interest-repayments-iwyp8kih Bloomberg reports Spanish banking stocks falling after the European Court of Justice ruled that the May 2013 cut-off point for unfair home mortgage payment reimbursements is illegal.

Borrowers who paid too much interest on home loans pre-dating a May 2013 Spanish ruling on so-called mortgage floors are entitled to a refund from their banks, judges at the EU Court of Justice ruled in Luxembourg Wednesday. The court said that a proposed time limit on the refunds is illegal and customers shouldn’t be bound by such unfair terms. Banco Sabadell SA fell as much as 7.5 percent, while Banco Popular slipped as much as 10.5 percent, the largest decliner in Spain’s Ibex 35 benchmark.

"This comes as a surprise and in a bad moment for Spanish banks as most of them would have to make extra provisions to pay for this,” Daragh Quinn, an analyst at Keefe Bruyette & Woods, said by phone. "It will mean pressure on capital generation and profits in the fourth quarter."

The EU court case comes as Spanish banks are under pressure from low interest rates and weak demand for credit, affecting their traditional business of lending. With 521 billion euros, home loans are one of the largest parts of Spanish bank lending business as they grew their real estate exposure during a construction boom in the country that burst at the end of the last decade. Some banks are still making provisions for bad loans, which also adds pressure to profit.

Banco Popular Espanol, Caixabank and Banco de Sabadell suffered most. Santander shares fell 1.25% and Bankinter by just 0.1%.

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