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HomeUpdate on Cyprus: Russian Banking Ingenuity
Posted by Larry Doyle on March 26th, 2013 7:51 AM |
With the news that the larger depositors (i.e, those accounts with greater than EU100,000) in Cypriot banks will bear the brunt of the burden of the bailout and bail-in, one would think this might incite fear and outrage amongst this crowd.
These depositors are being prepped to lose upwards of 40% of their holdings. Many of these depositors are known to be Russian businessmen.
Who knows what the future holds for the island nation of Cyprus, but if we were to believe some of what we read in the Financial Times this morning, the fear and angst expected within the Russian business community seems to be met with an amazing sense of equanimity. How so? (more…)
Cyprus: An Insider’s Perspective
Posted by Larry Doyle on March 25th, 2013 11:59 AM |
News that Cyprus has negotiated a bailout of its banking system replete with massive haircuts for depositors with greater than EU100,000 and capital controls as well may have forestalled a meltdown within markets. Yet this small island nation faces a very uncertain economic future.
How might what unfolds there impact other nations in the EU if not elsewhere in the world as well? Will the bailout and associated bail-in of the Cypriot banking system ultimately be a deal which precipitates the departure of this nation from the Euro-zone?
Let’s navigate and get an insider’s perspective from Athanasios Orphanides, the former governor of the Central Bank of Cyprus, who was interviewed on Bloomberg Surveillance this morning: (more…)
Who/What is Driving European Sovereign Spreads?
Posted by Larry Doyle on April 27th, 2012 9:11 AM |
The center of our global financial crisis squarely rests upon the Euro-zone in general and a number of peripheral sovereign states specifically. The movement in spreads within this market are often vicious.
The European Central Bank has thrown the kitchen sink in the form of its 3-year LTRO (long term refinancing operation) at the massive debt problem. The LTRO aside, do you get the sense that there is a far greater force at work behind the scenes driving these markets? I do. Who and what are really driving spreads within the Euro-zone?
Let’s navigate as the Journal of International Money and Finance addresses this critically important topic in its April 2012 issue. (more…)
Central Bankers’ Favorite Games: We’re Being Played
Posted by Larry Doyle on February 21st, 2012 10:30 AM |
War. Street hockey. Hide the belt. Kick the can. Flipping cards.
The games of my youth growing up in my neighborhood section of Boston provide very fond memories. The best part of these games was the simple fact that everybody was included, the rules were clear cut, and the older kids looked out for the little guys.
In a manner of speaking, the central bankers of today are similarly engaged in a few different games. What are the games being played on both sides of the Atlantic? Kick the can and charades. Regrettably, the central bankers are not playing by the rules as we defined them.
Might Germany “Annex” Greece and “Breakthrough to a New Europe”?
Posted by Larry Doyle on January 31st, 2012 6:37 AM |
You do not need me to tell you that it can get mighty cold in Germany during the winter months.
Don’t you think many Germans would like a nice warm vacation in the Greek Isles when those winds are whipping through the cold, dark forests and industrial cities of Deutschland? Sounds nice, heh??
Think the Germans may bargain for discount vacations in Greece if not outright ownership of some prime beachfront real estate in the Greek Isles as potential compensation for bailing Greece out of its current fiscal mess?
I am speaking largely in jest…but not totally. Why so? Let’s navigate. (more…)
What Will Really Happen in Europe?
Posted by Larry Doyle on December 5th, 2011 6:44 PM |
Are we really supposed to believe the news released today that German Prime Minister Angela Merkel and French Prime Minister Nicolas Sarkozy favor a meaningful change in the Maastricht Treaty which serves as the basis for the European Union?
Seriously, how many times have we gone down this road hearing that the European heads of state and central bankers have struck a deal to save the EU and the euro?
Didn’t we just hear news of that sort merely a month ago, and now once again all eyes and ears are on the next major European summit to be held later this week? In typical, political fashion, the markets and ministers are front running the summit in an attempt to convey an air of equanimity while pretending that they are about to pull the proverbial rabbit out of the hat. (more…)
Is Germany Preparing a European Power Play?
Posted by Larry Doyle on November 17th, 2011 10:36 AM |
What will be the end game for the European Union? Clearly the EU will not and cannot maintain the status quo.
With contagion clearly spreading throughout the EU and by extension the global economy, the stakes within the EU are raised almost on a daily basis. Where will this end up?
Who knows but what we do know is that the “road to perdition” or some form of “extended purgatory” will ultimately run not through Brussels, nor London, nor Paris, nor Athens, nor Rome but through the German capital of Berlin.
What are the Germans thinking? What might they have in store? (more…)
European Bank Stress Tests? Nein, Danke!!
Posted by Larry Doyle on June 1st, 2010 8:58 AM |
How do you think the wizards in Washington are feeling about the European bailout structured two weeks ago at their behest? In those two weeks, the Euro has plummeted another 5%, equities continue to suffer, and credit spreads continue to widen.
Our Washington wizards are looking back into their bag of tricks and now recommending another of their ‘shell game’ proposals to their European counterparts. Which proposal might this be? How do you spell charade? Try, bank stress tests.
Treasury Secretary Geithner is pressuring European central bankers to perform and release bank stress tests as a precursor to restoring financial health and stability into the European system. The Wall Street Journal highlights Geithner’s recommendation this morning in writing, U.S. to Push Europe on Stress Tests:
The U.S. intends to urge Europe to disclose publicly the results of bank stress tests as a way to calm jitters over the health of the Continent’s financial system, U.S. officials said. (more…)
Is the Federal Reserve Behind the European Bailout? Audit the Fed!! [UPDATED with video]
Posted by Larry Doyle on May 10th, 2010 12:52 PM |
Is the American taxpayer ultimately bailing out the European Union? Far fetched? Don’t be so sure.
While the focus of the European bailout has been on the European Central Bank, the European Union, and the IMF, little attention is being given to swap lines which were reopened between the Federal Reserve and the European Central Bank.
The ECB has steadfastly fought the idea of breeching the principles which formed the European common currency (the Euro) in order to fashion a bailout for the EU. Did the ECB crater to political pressure by the EU? Or, did the risks of the bailout shift from the ECB to another large central bank? Such as? The Federal Reserve! (more…)
