100 posts
How banks get away with inventing profits | Gordon Kerr
Abetted by a sloppy bailout structure, bankers now produce financial statements that would make Bernie Madoff blushBoth sides of the political divide are in agreement that bailing out the UK's failed banks in 2008 (and Northern Rock in 2007) was the...
Banking Intermediation, FRB & Bank Runs
Having described the tools available to the ECB (and these can be generalized to other CBs), I would like to briefly consider the functioning of the banking sector. In this post I will consider the very basic concepts of banking … Continue read...
THE WORST VERY DECENT COUNTRY IN THE WORLD: A LOLGREECE CHRISTMAS CAROL
UPDATE: A Greek version of this post was published on 5 Jan 2012 by protagon.grIn my months of relative absence I’ve been reading this blog over and over again, looking for things I ought to have done better or things I used to do well but no longe...
David Cameron has left the City more, not less, vulnerable to EU law | Philip Whyte
Cameron may have feared Sarkozy and Merkel taming the City, but the UK is now powerless to thwart new legislationThere are many puzzles about the British government's tactics at last week's EU summit. One is why it chose to identify the City of Londo...
Collateral crunch, commodity financing edition
Look at any financial market long enough and it starts to resemble the repo market.Conventional sales and buybacks. Islamic finance. Covered bonds. Commodity contango or backwardation trades....
Corporate bonds to the rescue?
Back in September, the FT reported an interesting estimate by JP Morgan.Twenty-eight European banks would have faced a total liquidity shortfall of €493bn at the end of 2010,...
Why I was wrong, by Dick Bove
Rochedale’s Dick Bove has pondered why he’s been wrong on the banks — spurred on, he writes, by a Bloomberg survey (which we couldn’t find) showing analysts’...
European banks: Gone ECBing
Morgan Stanley is not making recommendations about which European banks to invest in. They are just telling you which ones are even worse than other ones, as they go through the...
Women Given a Poor Deal by the Banks
Evidence has come to light today that women are being discriminated against by banks. The report, entitled ‘Women and Banks: Are Female Customers Facing Discrimination?’, by Noreena Hertz, looks at several cases where banks have discrim...
Restructuring, loans to Greece cost Dexia $8.7B
BRUSSELS — Dexia, the Franco-Belgian lender that had to be bailed out last month, said Wednesday the firesale of its Belgian retail business and losses on Greek government bonds cost it almost euro6.32 billion ($8.74 billion) in the third quarter.
Do It Yourself Bank Stress Test
Don't trust the authorities? Try your own stress test. (h/t pg)...
Those who profited on the road to financial crisis can compensate now. Get giving | Timothy Garton Ash
Charity is no substitute for systemic reform, but it can help a lot in the meantime. And bankers have a moral debt to payBetween the steps of St Paul's Cathedral and the G20 meeting in Cannes, I have this message to bankers: give some of it back. By...
Banks and States
Nicolas Véron argues that European banks must sever their ties with individual states and be placed under a transnational European Banking Authority with "supervisory and resolution authority." In other words, the EU should regulate banks, insure de...
Are Europe’s banks in crisis?
Slowly, painfully slowly, a plan seems to be coming together to save the Eurozone. Wolfgang Münchau, writing in The Financial Times, says he has never seen European leaders looking so scared. And they have good reason to be scared; Robert Peston, &...
Bank One: Adding to Systemic Risk
How soon we forget. How soon the financial crisis in September 2008 was relegated or even forgotten. Exactly three years later, the New York Times reported that Republicans have been repeatedly invoking the Dodd-Frank Act’s 848-page length and rule...
Interactive Debt Map
A fun toy to see just how bad shape your bank is in. The politicians are saying everything is fine; the IMF disagrees.
Eurozone blues
Who is going to be the Herostratus of the eurozone? Many are in the running if we try to follow events.In the column Public debt in the Eurozone, Japan, and the US, professor Charles Wyplosz presented a report about the ease of accumulating excessive...
Hungarian Minister Says Banks Should Share Burdens
Hungary's government will ensure banks accept their share of burdens and risks during a difficult time for the country, Development Minister Tamas Fellegi said.
Why you shouldn’t trust the WSJ piece on BNP Paribas
Reasons to doubt the WSJ claim about BNP Paribas: it's the WSJ, the author is a hack, the article is laden with embarrassing mistakes. Related posts:Corruption in France To Whom It May Concern Highly leveraged...
Banks Pinched by Hungary’s Debt Rescue Plan
A plan by Hungary’s government to aid troubled foreign currency debtors with an exchange-rate fixing plan is already bringing pain to the banking sector.
French Banks
French Banks are now in the eye of the financial storm. The government has contingency plans to supply fresh capital or even to nationalize the three top banks: SocGen, Crédit Agricole, and BNP Paribas.When I began this blog in 2007, this is not wha...
Why are German banks hiding?
French banks are being pounded again today for holding so much Greek debt, but the other story this week (still) is that a number of German banks have decided to withdraw from the stress testing of the European Banking Authority. To which my res...
mining in North Manchester
Alex’s post on the sub-prime/ legal loansharking industry’s rental of the Conservative Party reminds me again of the odd cluster of payday loan cum pawnbroking storefronts in our local high street; four on a hundred yard frontage. Now the thing i...
Moody's Downgrade for French Banks
BNP Paribas and Crédit Agricole are expected to be downgraded one notch and SocGen two notches owing to Greek debt exposure and decline in share value.
French Banks Fudge Losses on Greek Debt
The French are not the only offenders but apparently are the worst:Broadly speaking, there seems to be a consensus within countries. British banks were most willing to swallow bad medicine and admit the bonds were worth far less than par value. Some...
Europe’s banks could be in big trouble
On August 28th the IMF’s new chief Christine Lagarde was bombarded with criticism after she insisted that Europe’s weakest banks need urgent recapitalization in order to curb contagion in the euro crisis. Her main critics were ECB president Jean-...
More on the insolvency of the European banking system
European banks are verging on insolvency. The sooner EU officials accept there is a problem, the better, since they will start searching for solutions. Image Source: econintersect I have for... To view the full entry click on the title or visit...
FT video: Roubini sides with IMF on eurozone banks
At the Ambrosetti forum in northern Italy, Nouriel Roubini, the US-based economist, weighs in on the health of Europe’s banks and sides with IMF chief Christine Lagarde on the need for the sector to raise even more capital.
I KNOWZ, A MERGUR WILL FIX IT! PART 2
The rate at which posts on this blog end up spawning sequels never ceases to amaze me.Readers will, by now, have read about the planned (and presumably done) deal to merge two of the largest Greek banks, EFG and Alpha. You can also check out my frien...
Banking on Buffett’s Bank
Beyond wondering what could Ken Lewis have been thinking when he ok’d Bank of America’s purchase of Countrywide, it might be worth pondering why the Dodd-Frank Financial Reform Law of 2010 did not mandate splitting up banks such as Bank of Americ...
Apple Is Worth More than ALL Eurozone Banks Combined
Here:That's the stark result from a steep fall in the share price of banks including Spain's Santander,France's BNP Paribas, Germany's Deutsche Bank and Italy's Unicredit, compared to a steady rise in Apple's valuat...
Is it time to consider the unthinkable? Nationalisation of the banking industry?
In a past post, back on November 9, 2009, titled: Is free market capitalism fatally flawed?, I argued inter alia that: a) The economic system in many countries today is flawed but that system is not free market capitalism b) A key factor leading to...
Stress and State Finances
A smug feeling must have pervaded through the Square Mile of London on Friday, when none of the major English banks failed the ECB stress tests. This is however only a slither of a much longer drama being played out in both the financial markets and...
EBA stress test: Individual PIIGS exposure for all 90 banks
When the European Banking Authority (EBA) published their stress test results last Friday, they also made public the exposure of individual banks towards government bonds. In terms of transparancy, that’s a big step forward. Prior to the public...
8 banks flunk controversial European stress test
By DAVID McHUGH and GABRIELE STEINHAUSER FRANKFURT, Germany (AP) — Eight of 90 banks flunked stress tests projecting how they would fare in another recession, and 16 more barely passed — but the results proved controversial. Some countrie...
Legal Framework for Eurosystem National Central Banks
by Andres Tupits (Senior Associate at Sorainen) My recent PhD thesis at the University of London analyses legal issues related to the participation in the Eurosystem by a national central bank (NCB). My aim is to develop principles that could be used...
Bank Exposure: The Eurozone Risk
The FT website has an updated infographic on Bank Exposure: The Eurozone Risk. ...
MEPs Quiz ECB VP on Annual Report
The ECB's Annual Report for 2010 was published yesterday, and presented to the European Parliament's Economic and Monetary Affairs Committee (ECON) by ECB Vice President Vítor Constâncio. This post links to the relevant sources and notes...
Wall Street Banks and their Regulators: A Coalition Circumventing Justice?
According to The New York Times, “legal experts point to numerous questionable activities where criminal probes might have borne fruit and possibly still could. Investigators, they argue, could look more deeply at the failure of executives to fully...
Ireland Banking Day of DOOOOOM
The government is announcing the results of stress tests at 4:30pm today and is expected...
EU bank emerges from the shadows: EIB meets with civil society
Traumatised by voter rejection in a series of referenda, EU institutions are full of existential dread about the relevance of their mission to that mythical beast ‘the European citizen’. Consequently ‘engaging with civil society&#...
A more complicated game for central banks
"The West’s financial crisis has shaken public confidence in its leading central banks. Yet it has also led to an expansion of their duties and powers. ...In a sense, central banks have returned to their roots. The first central banks were...
Licence to kill: banking experts discuss EU crisis management proposals
It is widely recognised that one of the major factors that precipitated the recent financial crisis was the distorted incentives and ineffective governance structures of financial institutions. These were designed in such a way as to leave th...
European Interdependences (1): Banking
I start this new series of posts with banking, because I’ve been wasting some time thinking about it.This post is divided in two parts. In the first part I look at banking claims on specific countries. In the second part … Continue readin...
How to prevent bubbles
The new year sees the launch of the EU’s new financial supervisors: the European Banking Authority, the European Insurance and Occupational Pensions Authority and the European Securities and Markets Authority. If you haven't already done so, have a...
Boratier: “Bonking will never be the same again”
London, 2nd January 2011. An impeccably dressed gentleman with an impressive head of silver hair arrives at the reception desk of Tower 42, 25 Old Broad Street, EC2. A bleary-eyed entourage stumble uncertainly after him, wondering why their holidays...
Whither New Stress Tests for European Banks?
The European Commission is calling for new stress tests for European banks. The reason? Well, it appears that the previous stress tests during the summer failed to spot huge problems at the heart of Ireland’s financial institutions. Oli Rehn is...
Ireland: Lead us not into temptation
Wall Street Journal Europe editorial – Ireland’s plight is not the result of collecting too little tax. The country is a victim of the global credit bubble, which tended to hit hardest the countries that had the largest and most innovativ...
Ireland: The timidity of the lawyers
Perhaps the biggest puzzle of Ireland’s 2+ years of economic crisis is the lack of progress on restructuring the banking sector, and in particular the reluctance to follow through on the implications of having guaranteed the liabilities of inso...
Banking 1.999999999
Even though « Finance » was my second major, back in Business School, I am not keen on talking with my banker. Somehow, the discussion always ends up about the way I (mis)use my money, with a loth of sighing and frowning in the process. I was not t...
Time for a trip to Paddy Power?
The Guards are saying that a decision will be made soon on possible Anglo Irish prosecutions. Anyone considered a flutter on the almost guaranteed collapse of the trial on the basis that such is the demonisation of the bank that its employees can no...
"Even bankers want nationalised banks" by George Irvin
My friend Duncan Weldon has just circulated a fascinating piece from FT Alphaville which includes an e-mail exchange between bankers at UBS on the need for state-run infrastructure banks. See: http://ftalphaville.ft.com/blog/2010/10/18/373051/magnus-...
John Lanchester: action on the banks has to be international
This new Lehmans scandal sums up two of the biggest problems that we – the voting, taxpaying general public – still have with the banks, almost two years after they blew up and we bailed them out. First, the operation of capital markets is inte...
Mobile Bankers and Static States: Accountability and Fairness in the Era of Global Capital
Banks are global; banking regulators are national. In an age of globalised finance, it might be time to rethink those national boundaries Related posts:Social services in time of recession: What can the EU do to ensure their continued provision? Eu...
The Titanic Syndrome.
Watching “Freefall”, the documentary about the banking crisis and its effect on Ireland, it’s easy to find Bertie Ahern’s “None of dem smart fellas said nuttin” act wearing a bit thin. We paid him €400k a year pl...
An unnerving thought
With each passing day, it’s getting harder to believe Europe’s banks are in as good shape as their regulators say. That could be a problem for a global economy still struggling to recover from a deep recession.Well that is the opinion of Mark Whi...
Small mercies
Credit etc. The UK has managed with a few others to stop the introduction of a Tobin tax in Europe.Banks escaped a tax on financial transactions after the U.K. and other countries undermined plans to use the levy to help repair the damage to national...
Facebook Says Santander Best Match For BZ WBK
It turns out some Poles feel strongly about who will buy Bank Zachodni WBK. The other day as I was leaving our office building, our doorman asked me: "So, what do you think, who'll buy it? PKO or Santander?" Surprised he was even aware BZ WBK was f...
Venezuela: Amendments to Central Bank Law
Following up on my earlier post regarding changes in the Law of the Central Bank of Venezuela, here is the link to the amendments adopted earlier this year--in Spanish only.
Kosovo: New Central Bank Law
The new Law on the Central Bank of the Republic of Kosovo (CBK) has come into force, revoking the old CBK Law.
Governance Dutch Central Bank To Be Changed
This week The Netherlands' Minister of Finance announced changes to the governance of De Nederlandsche Bank (DNB, the Dutch central bank and prudential supervisor of the financial sector). The Minister will send Parliament proposals to change the cen...
Ireland: A recession of the banks, by the banks, and for the banks
Some stories heard in rural Ireland this summer. A farmer goes into an embattled tractor dealer and reaches an understanding on the purchase of an expensive tractor. The farmer then goes to his local bank manager to get financing to purchase th...
A Cautionary Tale From the U.K.
Europe's mutually owned banks are seeking private capital. The experience of Britain's building societies that demutualized more than a decade ago suggests caution.
European banks survive stress test? Aaaah!
The stress tests of 91 European banks in 20 EU countries indicates "the banks are doing well". Good news, no doubt. At least, the results sound a lot better then some thought. With some relief, media across Europe announced "only...
Bank Capital? No Problem, Right?
Thank goodness for that. We can embark on our summer break knowing that a lack of bank capital wasn't a problem after all. Can't we?
