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.
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The week ended with the fall of most leading stock indexes in Asia as a reason for that and today was the news from China. Forecast of Goldman Sachs showed that the country’s economic growth will fall below 8 percent on a quarterly basis in the second half of the year, which was disappointing for markets. As a result, Shanghai Composite fell 2.1 per cent, but at the end of the session managed to hit the green with a 0.4 per cent to 2383 points. Despite the growth, however, the index has lost more than 7 percent last week. Shortly before the end of the regional trade index MSCI Asia Pacific is moving at a decline of 0.4 percent to 111.49 points. This means that it fell by 3.6 per cent for the week and its value reached its lowest level in three weeks. At the opposite pole today was the major index in Taiwan Taiex, which rose 1.06 percent to 7 330.74 points. This is due to the trade agreement signed with China earlier in the week. Expected by him to achieve acceleration of the integration process in the region of Asia. Today in Tokyo the Nikkei 225 rose 0.13 percent to 9203, 71 pp. However, the index decreased by more than 5 percent last week.
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The Executive Director of Goldman Sachs defended the company’s role in the creation of complex securities, considered by some to be the cause of the financial crisis, Reuters reported. Lloyd Blankfane had to answer questions from the committee investigating the causes of the crisis, focusing on the creation by Goldman risk on derivatives of mortgages, while the bank has been going on short sales with them, or bet for lowering their value. “These exposures are sought by professional investors,” said Blankfeyn, who occasionally interrupted the committee chairman, Phil Angelides. “Even now people come to us asking for exposures to these instruments,” he added. “I sound a little like to sell a car with damaged brakes and then buy an insurance policy to the buyer of the car, not comment on Angelides. Testimony before the Committee, except Blankfeyn, have CEOs of JPMorgan Chase Jamie Diamond and Bank of America Brian Moynihan, as chairman of Morgan Stanley John Mack. Have defended the four practices before the Commission to distribute bonuses in the sector, while recognizing the need for regulatory changes. Angelides has four bank directors warned that the committee will continue throughout the year with hearings on hundreds of witnesses. Commission created by Congress in model Pekora committee investigating the collapse of Wall Street in 1929, must submit its report by 15 December. Pekora findings of the Committee helped lead to the creation of the U.S. stock regulator (SEC) and other major reforms.
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