Financial Communique » banks

EU could ease the capital requirements for the banks

Viliyana Filipova — Mon, 06 Feb 2012 21:18:55 +0000

The European banking regulator may consider easing its capital requirements for banks. Later this week in London, the European banking regulator (EBA) will hold a meeting that will review in December announced new capital requirements. The requesting anonymity because of confidentiality of the talks, the meeting will be reviewed in the new higher capital buffers that banks must have on their bond holdings of certain eurozone countries. As part of measures to tackle the debt crisis, EBA asked European banks by the end of June to raise 114.7 billion additional capital. The regulator wants banks to increase their capital adequacy ratio to 9%, and to accumulate additional capital buffers, according to market value of bonds having difficulties in the euro area they have.
“To calculate the need for additional capital based on returns so volatile it was the right decision”, said Nicolas Veron, strategist at Bruegel, a Brussels-based economic research agency. “This decision is the result of political negotiations, so it is not right to blame the EBA”. Any decision to change the government buffers will be considered only after consulting the European Systemic Risk Board (ESRB) – organization of central bankers in Europe, indicate the sources compiled by Bloomberg. “The need for these buffers and their size will be reviewed, where measures to tackle the debt crisis have an impact on bond markets”, said Andrea Henri in January, President of the EBA.

The Eurozone banks are competing for 2 trillion EUR in 2012

Viliyana Filipova — Sat, 03 Dec 2011 14:54:31 +0000

The European banks to compete with the governments of the euro area to recruit 2 trillion. dollars next year because of the need for refinancing of reaching maturity bonds. In 2012 the Eurozone governments have to repay 1.1 trillion. euros and short-term bonds and 519 billion of this amount are Italian, French and German bonds reaching maturity in the first half of the year. In the first half of next year, European banks need to service their debts to 665 billion dollars by the end of December, 370 billion dollars, revealed details of Citigroup Inc.
“Serious investors flee as the bonds of European banks and government securities of euro area countries”, said Mark Grant, director of Southwest Securities Inc. “The quality of the financial performance of both the asset class is in question and nothing is being done to tackle Europe’s debt crisis”. In 2012, the European banks need to refinance an average of 230 billion dollars every three months, said Lisa Hintz, an analyst at Moody’s Corp. in New York. For comparison, the 11 quarters September 30, 2011 banks have repaid an average of 132 billion dollars, she said.
“In such a situation of scarce funding banks to compete effectively with governments,” said Hitntz. “Just look at their business model. What soft loans could obtain an Italian or Spanish bank, when the price of its financing is similar to that of government bonds, or about 7% and above? “she said.

Moody’s decreased the forecast for the Russian banking sector

Viliyana Filipova — Wed, 26 Oct 2011 11:50:29 +0000

The International rating agency Moody’s today lowered its forecast for the Russian banking system as a whole to “negative” from “stable”, said in a statement posted on the official website of the agency.
“Changing the outlook for the Russian banking system to” negative “reflects concerns that weakness in the global economy and volatility in financial markets will weaken the operational situation in Russia, reflecting adversely on the banks by systemic liquidity squeeze, slower credit growth and depressed asset quality”, was send in a press communique. The report reflects the agency’s expectations for the underlying credit conditions in the banking sector for the next 12-18 months. From Moody’s predicts that because of weak economic recovery growth of real gross domestic product of Russia will slow to 2.8% in 2012 from this year’s expected 3.8%. The Russian economic growth depends mainly on oil prices, which increases the risk that global demand for energy may further affect the operational environment for Russian banks in the forecast period.
“Volatility in global financial markets, limited access to common funding continued rapid movement of capital and the pressure on the ruble has led to pressure on liquidity in the Russian banking system”, said Eugene Tarzimanov, vice president of Moody’s.
“We expect this to continue and lead to slower credit growth, leading to reduced access to credit for the recipients, as banks increase interest rates and tighten conditions further. This will further lead to suppressed growth and an increase in reserves to cover bad loans”, he added.
The government support remains a key factor for creditors of Russian banks and we expect this to be no change noted by Moody’s, it does not fail to emphasize that the Russian Central Bank and Ministry of Finance of the country have already begun to support liquidity in response a deteriorating environment.
“We believe that this support is likely to increase, but there is no assurance that it will be available for medium and small banks in the private sector, if you need it”, says Tarzimanov. Despite the negative outlook for the Russian banking system, the individual ratings of 91% of banks that Moody’s places have a stable outlook, wrote in the agency.

EU will request information from banks for employees with yearly incomes of more than 1 million EUR

Viliyana Filipova — Mon, 25 Jul 2011 19:57:00 +0000

Since the European banks will be required to disclose more information about the number of employees who earn more than 1 million annually. It shows the mood in Brussels. The European Commission has proposed to the authorities in different countries to collect information on the number of people earning over 1 million a year and a breakdown of their income – salary, bonuses, long-term bonuses and pension contributions. The information will be sent in the new European banking regulator, who will publish it for the country in the same form for the 27 Member States of the European Union. The idea was included in the comprehensive proposals as part of the bill for major changes in the rules for the banking sector. Much of the proposals concern the introduction of a new international agreement, known as “Basel III”, which aims to increase the quantity and quality of banks’ capital. Most of the proposals contained in the rules that if adopted, will be binding on Member States and institutions. But the package also contains a directive that – despite the introduction of a requirement for disclosure of remuneration – aims to harmonize and strengthen sanctions against banks that violate the rules.
It includes various measures for managing corporate finance sector to reduce dependence on foreign banks’ credit ratings by focusing attention on internal estimates. In the draft includes proposals for capital buffers and bank supervision. Both parts of the package of proposals – draft rules and draft – require the approval of Member States and the European Parliament before they take effect. In addition, since the directive is approved, Member States will have to include it in their national legislation. The elements of both parts of the package would appear to be controversial, sparking intense debate between MEPs and the Member States before they reach the final voting. Some Member States as they would like more flexibility in standards and ratios for additional capital and would have insisted that they be larger than recorded in the proposals. Some of the definitions of what it includes high quality equity you already have been seriously discussed. Ultimately, it seems likely the last version of the legal measures to be agreed during the second half of 2012.
EU is the first organization in the world, which will begin performances by the introduction of “Basel III” in its legislation.

Regulations will not pass private German Banks

Viliyana Filipova — Sun, 05 Sep 2010 05:20:21 +0000

Throughout its history, dating from the 16th century, private banks in Germany have experienced two world wars, the Great Depression and financial crisis, but now face a different challenge – new regulations. M.M. Warburg & Co., Berenberg Bank, Bankhaus Lampe, Hauck & Aufhaeuser Privatbankiers and B. Metzler seel. Sohn & Co., The largest private banks in the country, argue that their conservative strategies are translated them through the credit crunch. However, their performance will not exempt them from the proposed new regulations designed to improve market stability and to limit the risks of their larger public competitors Deutsche Bank AG and UBS AG. “All banks, no matter what wine to bring the crisis will be affected,” says Van Volker Ruth, a partner at Hauck & Aufhaeuser. “For the moment it is unclear how regulators will distinguish between banks that had a healthy policy and those who have followed higher-risk models,” he added. On August 25 the cabinet of Germany’s Chancellor Angela Merkel approved measures requiring banks to Germany invest in the fund, designed to shift the cost to rescue troubled financial institutions in future financial crises from taxpayers to the banking system. According to the draft banks will calculate the amounts to be imported into the new fund, according to their assets and risks incurred. According to government estimates in the new year fund will come around 1.3 billion. Under the new regulations proposed by the Basel Committee on Banking Supervision (BCBS), private banks may be faced with higher capital adequacy requirements and liquidity as well as new restrictions on how many can borrow. In BCBS members of regulatory authorities and central banks from 27 countries. To fulfill the requirements of regulators, banks may be forced to devote more funds to carry out transactions, information technology and its employees, which will affect its profit.
“Regulations are a challenge, especially for small banks,” said Andreas Becker of EGC Eurogroup Consulting AG. “This will affect the cost of the item profit, and without it does not look good for most private banks,” he added. The average rate of return on equity (ROE) for the 20 major private banks in Germany in 2008 was 2.1 percent – lower than the average performance of private banks in Austria – 8.2% and Switzerland – 9.1 %. Cost index for private profit Germanic banks increased to 87% this year, study shows EGC Eurogroup Consulting. “Regulations will undoubtedly lead to higher prices,” said Christian Olearius, spokesman of MM Warburg. “Government interventions usually help large banks may incur costs and are considered to be systematically more important.

European banks will be put on stress tests more often

Viliyana Filipova — Sat, 21 Aug 2010 07:33:57 +0000

The European banks will be subjected to more frequent stress tests to be strengthened, thus investor confidence in the banking system in the old continent. It told the Bloomberg European Commissioner for Economic and Monetary Policy Commissioner Olli Rehn, specifying that regulatory authorities in the European Union (EU) to consider in what interval to repeat testing of credit institutions in Europe. According to Olli Rehn, stress tests are very important and useful tool for restoring confidence in the financial system and ensure transparency in the banking sector. He added that through them that will provide information for making a solid and reliable analysis of its condition. Olli Rehn plans to discuss the introduction of more frequent testing of banks with the 27 EU finance ministers at the meeting with them, which will be held on 7 September in Brussels. Financial regulators in Europe each year to undergo stress tests the largest banks in the EU. In July were tested 91 of the largest European banks, which account for 65% of the banking industry on the continent. Of these, seven did not pass, including Germany mortgage lender Hypo Real Estate Holding, Greek Agricultural Bank of Greece and five savings banks in Spain. Tests showed that they have enough capital to avoid bankruptcy in case of re-recession and depreciation of government securities.
The results of stress tests were published on July 23 and showed what the investment banks in government securities. Critics, however, were dissatisfied with their lack of rigor applied to the scenarios, which showed that banks in Europe need only 3.5 billion additional capital.

US banks are emitting new debt

Viliyana Filipova — Fri, 30 Jul 2010 12:46:11 +0000

The U.S. banks do everything possible to take advantage of low interest rates and rising confidence in myself to the strong performance of the sector this year. This is done through the issuance of significant amounts of new debt, thereby setting the basis for solid gains in the coming years, writes Financial Times. The high interest in fundraising in the U.S. is in sharp contrast with what is happening in Europe, where banks have problems in the issuance of bonds for government debt crisis in the euro area. In recent months, banks such as JPMorgan, US Bancorp, Goldman Sachs and Morgan Stanley easily sell bonds, which indicates a change in market sentiment and increased confidence in the sector. Less than two years after massive U.S. government intervention to rescue the financial system, U.S. banks managed to raise over 7 billion dollars by issuing debt within only one week. According to data from Dealogic, it is the largest amount of new bonds placed for one week since September last year. The US Bancorp has attracted $ 1 billion by selling five-year bonds at 2.45 percent interest. This is one of the lowest interest rates in history paid by Bank in bond, adds Financial Times.
With the low cost of borrowed stock banks managed to increase its profits as it improves their interest margin. Therefore, financial institutions are increasingly issuing new debt, just this month Goldman Sachs, Morgan Stanley and JPMorgan have gathered a $ 3 billion of new bonds. Cheapest loan capital allows banks to replace their old debts with new ones that are at a lower price. Thus, according to estimates of Moody’s, U.S. banks have managed to cover about 200 billion of total 372 billion dollars debt, maturing this year.

Three more banks were closed for a week in USA

Viliyana Filipova — Mon, 28 Jun 2010 10:49:37 +0000

The end of the working week has brought the closure of three U.S. banks. Thus the number of bank failures in the country since the beginning of the year amounted to 86 and is on track to improve last year’s record of 140 closed financial institutions – the highest number since 1992. Federal deposit insurance corporation in (FDIC) has closed banks in the states of Florida and New Mexico, Georgia, as buyers are financial institutions by the states. The three failure will cost the FDIC 284,6 million dollars. “The growing problems in commercial property and the ongoing crisis in housing loans will cause many bankruptcies,” said Walter Mix, managing director at financial consulting firm LECG LLC. Over the next three and a half years the bank will claim the bankruptcy 60 billion dollar fund to FDIC, said by the corporation on 22nd June. Fund out of deficit in third quarter of last year. Florida-based Peninsula Bank was purchased by Premier American Bank, owned by Bond Street Holdings LLC. January Holding buy two troubled banks. First National Bank of Jordan was been sold by the FDIC of Savannah Bank, a High Desert State Bank in New Mexico – the First American Bank. In the first quarter of this year the list of troubled banks FDIC counts 775 institutions with assets of 431 billion.
At the end of last year’s list were 702 credit institutions with assets of 403 billion dollars, said in a quarterly report to the regulator.

Extractive companies and banks have brought a slight rise in Asian markets

Viliyana Filipova — Mon, 22 Mar 2010 23:01:09 +0000

Extractive companies and banks have brought a slight growth of Asian markets, after Australia & New Zealand Banking Group surprise their shareholders with news that will enter Taiwan, and metals prices rose. Meanwhile, companies in the residential sector of Japan and China are ranked among the losers, after local authorities in China have proceeded once again to restrict sales of land, while land prices in Japan reported its strongest decline for the past 36 years. The regional index MSCI Asia Pacific, which monitors stock markets in ten Asian countries, Australia and New Zealand, added 0.1 percent to 124.40 points during today’s session. Friday’s trading ended with significant decreases in most measures of national stock exchange in the region after the Indian central bank increased for the first time in the past two years its main interest rate as a step to combat rising inflation in the country. Most – by 0.7% to 3 053 points lower today Chinese broad index Shanghai Composite, followed by the index of blue chip Nikkei 225 in Japan, which slid 0.5 percent to 10 774 points. Of negative territory and closed stock trading in Taiwan, New Zealand and Sri Lanka. Meanwhile, the Australian index S & P / ASX 200 rose by 0.9 percent to 4 874.8 points, led by mining and financial companies. Shares of all major banks rose, with the most – by 3%, increase the price of shares of Australia & New Zealand Banking Group.
Today’s session brought increased and the securities markets in South Korea, Thailand, Indonesia and Thailand, where the main index added 0.6 percent from 1.3 percent to up its value. After the sharp drop yesterday, the index of the 30 largest Indian companies BSE Sensex 30 rose by 0.2% to 17 440.71 points and returned to its level at the end of 2009.

Mayor of London warned bankers for unexpected risks from Switzerland

Viliyana Filipova — Sat, 30 Jan 2010 16:54:59 +0000

The Mayor of London Boris Johnson warned the bankers to stay in the City of London, warning that the temptation to move to Switzerland to them face unexpected risks, officials said. “I am told that there are some parts of the canton of Bern, where men are not allowed to urinate made after 10 o’clock at night so as not to disturb their neighbors,” Johnson told a reception organized by the Japanese investment bank Nomura in the ski resort of Davos, which is currently being held traditional World Economic Forum. His comments in the room full of bankers, were made on the news that some hedge funds and investment bankers leave London and move to Switzerland to avoid the EU regulations or imposed in the UK tax revenue over a specified amount and on bonuses. “Time is the master of the universe to show that they can be both servants of society,” said Johnson, a former journalist and a frequent guest on satirical TV shows.
Moreover, Johnson has warned bankers that they have greater chances of survival in London than in New York. “Although the murders in New York are at their lowest level for all times, however, there are three times more likely to be killed in New York than in London, says London mayor.