ECB concerned by Irish bank bailout law

Interest rates rise in Spanish bond sale
Spain had to pay higher Interest Rates to raise 3.876 billion Euros via a bond sale Tuesday as investors remained nervous about whether the country may need a Debt rescue like Greece and Ireland. The treasury sold 3.0 billion Euros (3.9 billion US dollars) of three-month bills at an average yield of 1.804 percent, compared with 1.743 percent when the securities were last sold on November 23, The Economy ministry said. It also sold 876 million Euros of six-month bills at 2.597 percent compared wi...

Osborne: Europe debtors should solve 'own problems'
British Finance Minister George Osborne offered some tough love to Europe on Sunday, saying the nations in the region haunted by mounting Deficits need individually to "resolve their own problems." Osborne stressed that European countries like Portugal or Ireland with Balance Sheets under water should count on Euro zone support to avoid collapse, with Europe needing to "deal decisively" with the crisis. But in an interview with CNN he said "Europe shouldn't have to handle" the plunge in confiden...

Is the Ireland Bailout About to Become Bear Redux?
Not being an expert in either the Lisbon Treaty or the rules governing the ECB, I’m restricted in my ability to interpret an article in the Financial Times and the underlying position paper at the ECB on the legality of the Irish Bailout. The Irish Finance Minister asked for a reading on the “draft law”, which is the Credit Institutions (Stabilisation) Bill 2010. There is a certain amount of grumpy harrumphing in the ECB response, namely, that it should have been consulted ea...

Can vigilant creditors limit excess bank risk-taking?
I had promised to address that question.  Ideally, enforceable bond covenants should limit bank risk-taking, and ensure major bank solvency, but is that feasible?  I see a few problems with the idea: 1. It is very hard for a government or Central Bank to precommit to a "no Bailout" policy.  This is partly because of powerful Special Interests, but most of all because political time horizons are short.  Most bailouts do patch things up in the short run, whether...

Ireland's credit rating slashed five notches (by private company that helped precipitate the country's crisis)
© Peter Morrison/AP Thousands of demonstrators march through Dublin last month to Protest against Budget cuts and the EU-IMF Bailout. Moody's downgrades Ireland's Credit Rating and maintains 'negative' outlook on concerns cuts will hurt domestic demand Ireland's Credit Rating has been slashed by five notches by Moody's, which also warned that the country faced an increasingly uncertain economic future. Moody's said that the cost of rescuing Ireland's banking sector meant Irish Debt was ...

Unlikely commercial real estate rebound
For years commercial Real Estate has been billed as the next big train wreck. So why are some investors shouting all aboard? A slowly recovering economy is part of it, though no one expects to make a quick killing on loans and securities tied to Office Buildings, hotels, Shopping Malls and the like. The bigger drivers of this rally are the low rates pushing investors to reach for yield by taking on more risk, and the wide open junk Bond Market that has allowed lots of companies once left f...

Unlikely commercial real estate rebound
Riding the unlikely commercial Real Estate rebound Posted by Colin Barr December 20, 2010 6:41 am For years commercial Real Estate has been billed as the next big train wreck. So why are some investors shouting all aboard? A slowly recovering economy is part of it, though no one expects to make a quick killing on loans and securities tied to Office Buildings, hotels, Shopping Malls and the like. The bigger drivers of this rally are the low rates pushing investors to reach for yield by takin...

France’s AAA Grade at Risk as Rating Cuts Spread: Euro Credit
Dec. 20 (Bloomberg) -- France risks losing its top AAA grade as Europe’s Debt crisis prompts a wave of downgrades that threatens to engulf the region’s highest-rated borrowers, with Belgium also facing a possible cut, analysts and investors said. Moody’s Investors Service said Dec. 15 it may lower Spain’s rating, citing “substantial funding requirements,” and slashed Ireland’s rating by five levels on Dec. 17. Standard & Poor’s is reviewing its...

Walker's World: Euro fails again
Published: Dec. 20, 2010 at 6:07 AM French Minister of Economic Affairs, Industry and Employment Christine Lagarde in a 2009 file photo. (UPI Photo/ David Silpa) PARIS, Dec. 20 (UPI) -- French Finance Minister Christine Lagarde was right to say over the weekend that it will take much stronger fiscal and economic coordination among EU Member States for the Euro to work. The problem is that they are trying to rebuild the Euro Aircraft while it is still flying and they are already having trouble ke...

Protests rock Bangladesh as shares plunge
Hundreds of investors went on the rampage in the commercial heart of the Bangladeshi capital Dhaka after the Stock Exchange suffered its steepest ever fall. The benchmark DSE general index (DGEN) lost 552 points or 6.72 per cent by the close of trade on Sunday as panic gripped investors following last week's policy Rate Hike by the Central Bank and a series of recent volatile market swings. Local Police Chief Tofazzal Hossain said at least 500 investors hurled bricks at Law Enforcement officers ...

Scott Sumner as a normative philosopher of language
Recently Scott Sumner visited us and I pondered the following. Let's say that at the peak of a financial crisis, the Central Bank announces a firm intention to target a path or a level of nominal GDP, as Scott suggests.  If everyone is scrambling for Liquidity, and panic is present or recent, and M2 is falling, I wonder if the central bank's announcement will be much heeded.  The announcement simply isn't very focal, relative to the panic.&...

Spain makes progress, but huge reforms vital: OECD
Spain has every chance of rising above its economic crisis if it enacts bold reforms, the OECD said on Monday, just as the government announced details of a Pension overhaul, the latest in a series of recent steps to regain market confidence. Spain, in the eye of Financial Markets which are shunning its Debt bonds, has done much right in fighting the crisis, but must reform its labour Legislation and employment practices, the Organisation for Economic Cooperation and Development said. The econom...

Spain makes progress, but huge reforms vital: OECD
Spain has every chance of rising above its economic crisis if it enacts bold reforms, the OECD said on Monday, just as the government announced details of a Pension overhaul, the latest in a series of steps over two weeks to regain market confidence. Spain, in the eye of Financial Markets which are shunning its Debt bonds, has done much right in fighting the crisis, but must reform its labour Legislation and employment practices, the Organisation for Economic Cooperation and Development said. Th...

Spain makes progress, but huge reforms vital: OECD
Spain has every chance of rising above its economic crisis if it enacts bold reforms, the OECD said on Monday, just as the government a Pension overhaul, the latest in steps over two weeks to regain market confidence. Spain, in the eye of Financial Markets which are shunning its Debt bonds, has done much right in fighting the crisis, but must reform its labour Legislation and employment practices, the Organisation for Economic Cooperation and Development said. The Economy, which stalled in the t...

Eurozone trade deficit worsens
The Eurozone's balance of payments worsened slightly to a Deficit of 9.8 billion Euros (12.9 billion dollars) in October, the European Central Bank said on Monday. The balance of payments, which includes payments for imports and exports of trade in goods and services, is a closely tracked indicator of a country's or area's ability to pay its way in the world. It is crucial for the long-term confidence of investors and trading partners. In September, the eurozone measure showed a Deficit of 9....

Euro rises on China news, trims on Portugal fears
The Euro topped 1.32 dollars on Tuesday, after China expressed support for EU measures to tackle the Eurozone Debt crisis, but pared gains as Moody's warned over a possible Ratings downgrade for Portugal. The European single currency climbed as high as 1.3202 in early trade, before pulling back to 1.3154 dollars. That compared with 1.3126 dollars late in New York on Monday. "The Euro was at the heart of the action, with two events defining its price action," said currency Strategist Elsa Ligno...

Conergy shares climb after credit deal
Published: Dec. 20, 2010 at 2:30 PM Conergy office in Frankfurt, courtesy of Ralf Lotys via Wikimedia Commons. West vs. China in solar war FRANKFURT, Germany, Dec. 20 (UPI) -- Conergy shares soared nearly 20 percent in Monday trading after the Hamburg solar module maker said it had reached an agreement with creditors to more than half the company's $420 million Debt. The price for a Conergy share climbed to 59 euro cents after the company Friday announced that it had signed a refinancing packag...

Japan Central Bank Leaves Interest Rate Unchanged
Japan's Central Bank kept its key Interest Rate unchanged at effectively zero Tuesday as the country struggles to keep its Economic Recovery alive. In a widely expected decision, the Bank of Japan's nine-member policy board voted unanimously at a two-day meeting to keep the overnight call rate target at zero to 0.1 percent. The Central Bank maintained its assessment of the world's No. 3 economy. "Japan's economy still shows signs of a moderate recovery, but the recovery seems to be pausing," ...

Hungary's Central Bank Raises Interest Rates Again
LONDON -- Hungary's Central Bank on Monday increased the base rate by 25 basis points to 5.75%, effective from Tuesday. In contrast, most analysts expected no change to Interest Rates. In November, the Central Bank had raised rates by 25 basis points to 5.50%. The decision "will only add to rising tensions between the Central Bank and the government," said Neil Shearing, senior Emerging Market Economist at Capital Economics, in a note. "The bank justified last month's move on the grounds that th...

Osborne: Europe debtors should solve 'own problems'
British Finance Minister George Osborne offered some tough love to Europe on Sunday, saying the nations in the region haunted by mounting Deficits need individually to "resolve their own problems." Osborne stressed that European countries like Portugal or Ireland with Balance Sheets under water should count on euro zone support to avoid collapse, with Europe needing to "deal decisively" with the crisis. But in an interview with CNN he said "Europe shouldn't have to handle" the plunge in confid...

The bailout didn't save anything -- except some bank creditors
It's increasingly en vogue to assert -- as if it's some enlightened corrective to Populist anger -- that the Bailouts of 2008 were smashing successes that saved The Economy. There's little evidence of this, and there's plenty of reason to doubt it. Today, from the Business Insider and investor John Hussman, we get a good analysis of how TARP didn't help. He argues that our economy can take the collapse of banks, but that Fed requirements on reserves lead to disorderly liquidations, which cause t...

Rein in deficits or risk EU-style crisis, Jim Flaherty warns provinces
Last updated Monday, Dec. 20, 2010 3:05PM EST Canada must avoid heading in the same direction as the European Union, where many countries are in the throes of a Debt crisis, Finance Minister Jim Flaherty warns. He kicked off a one-day meeting with provincial ministers in Kananaskis, Alta., on Monday by calling on them to eliminate their Deficits by 2015. While most provinces now in deficit plan to balance their books within that time frame, Ontario will remain mired in red ink until 2018. Would ...

Canada to target debts and deficits in new year
Last updated Tuesday, Dec. 21, 2010 12:34AM EST Canada will enter 2011 on a different path to Economic Recovery from the United States, trading stimulus spending for a renewed focus on Debts and Deficits. Finance Ministers pledged on Monday to insulate the country from further global economic shocks by making deficit and debt reduction a top priority, although their unity was less certain on the subject of whether Ottawa or Ontario’s fiscal picture is of greatest concern. Would you support...

Top ECB executive defends bond buying program
The European Central Bank's chief Economist is defending its program to buy Government Bonds to counter market malfunctions amid the continent's ongoing Debt crisis. Juergen Stark told German newspaper Boersen-Zeitung in an interview published Tuesday that each country remains responsible for handling its own debt. He strongly rejected the idea of the 16-nation Eurozone evolving into a transfer union, saying it would "contradict the monetary union's fundamental principles." The ECB has bought &#...

Market Recap: 12.20.2010
: EUR/USD The pair finished the session lower on Monday amid renewed concerns over the ability of weaker EU states to refinance looming 2011 Debt obligations at favourable rates. Also, vague market chatter of an imminent Belgian sovereign downgrade weighed on overall market sentiment in spite of complete absence of any action or of an announcement by the main rating agencies. In addition to that, Tuesday sees the Spanish Debt agency attempt to auction around EUR 4bln worth of T-bills of which t...