The Fed cannot support net interest margins
On Christmas Eve, the Wall Street Journal had two interesting articles on the credit situation in the U.S., one from the banks’ perspective and one from the households’ perspective. In general, the...
View ArticleAll Hail Mario Draghi: The Spanish Bank Run is Over for Now
The Spanish bank run caused by redenomination risk is over. And Spanish bond yields are now back to around the 5% level today. Apparently, the ECB’s monetisation scheme has worked – and without Spain’s...
View ArticleIreland regains market access for both government and bank bonds
In yesterday’s links, I pointed to two links showing that Ireland had regained bond market access. Here is more evidence that Ireland is regaining bond market access. First, there was the Franfurter...
View ArticleConverting Irish debt controlled by Troika
Back in October of last year the Irish Finance Minister Michael Noonan said that his government’s goal is to be able to complete the three-year Troika bailout on time and resume normal operation late...
View ArticleGerman banks need more capital than Spanish ones according to OECD
This comes from El Pais, the Spanish daily newspaper (my translation below): The Organization for Economic Cooperation and Development (OECD) believes that eurozone banks still have much work to do to...
View ArticleWill Britain be forced out?
I want to briefly reiterate the theme of an October post on Britain’s role in Europe because of a speech the Prime Minister David Cameron made earlier today. Cameron, in a major speech in London,...
View ArticleFull text: Moody’s downgrades Canadian banks
Editor’s note: Moody’s Investor Service released the following note in conjunction with a ratings action it took on Canadian banks today. This was the culmination of a review that Moody’s began in late...
View ArticleThe theory of social costs: Why markets cannot discipline financial institutions
By L. Randall Wray I recently came across a video of one of my talks on the Global Financial Crisis, or, Global Economic Crisis, that provides a clear antitdote to orthodox thinking. You can view it...
View ArticleIreland to liquidate Anglo Irish to cut government debt
According to the Irish Times, the government of Ireland has entered into a deal with the ECB to cut the country’s debt by liquidating the nationalised Irish bank Anglo Irish. As I noted in the Saturday...
View ArticleEuropean banking union looks weak
The much-touted European banking union, designed to separate country and banking risk seen as the nexus around which the sovereign debt crisis has moved, looks weak. Even aside from Britain’s opt-out,...
View ArticleBuiter was right about Europe’s phony bank stress tests and the Dutch...
I am going to make this one quick but I thought it was necessary to call attention to this issue because it highlights how opaque the banking landscape in North America and Europe presently still is....
View ArticleNationalized Dutch bank investors fight expropriation
The shareholders and subordinated bond holders of SNS Reaal are now fighting an alleged expropriation at the Dutch Council of State. The investors are contesting the Dutch government’s position that...
View ArticleFrance’s poor economic outlook is Europe’s next problem
In November, soon after France and Belgium were forced to pump another 5.5 billion euros into bailed out lender Dexia, the ratings agency Moody’s stripped France of its AAA sovereign debt rating. The...
View ArticleChina, Spain and Japan: What I’ll be watching in 2013
By Michael Pettis I’ll be watching a number of things in 2013 in order to get a better sense of what the future will bring. On January 22 Princeton University Press will be publishing my book, The...
View ArticleMore evidence that the Germans have been marginalised at the ECB
It has been some time now since the ECB turned to monetisation to deal with its sovereign debt crisis. At the time, the Germans were out in full force attempting to stop the train of events and keep...
View ArticleUS Banks showed accounting gains of $141.3 billion in 2012, highest since 2006
Editor’s note: the following is the full text of the FDIC press release on US bank earnings in Q4 2012. Note that “[i]ncreased noninterest income and lower provisions for loan losses continued to...
View ArticleAn Italian voter speaks out on the real reasons Italians voted for Grillo
A reader of Credit Writedowns recently wrote to us, detailing why Italians voted as they did in the recent general election. Her view speaks more to families’ and small business’ rejection of...
View Article“Pervasive” Fraud by our “Most Reputable” Banks
By William K. Black A recent study confirmed that control fraud was endemic among our most elite financial institutions. Asset Quality Misrepresentation by Financial Intermediaries: Evidence from RMBS...
View ArticleThe Product is the Promise: Finance and Social Values
By Rick Bookstaber In the first paragraph of my book A Demon of Our Own Design (Wiley, 2007) I observe that “You don’t deliberately obliterate hundreds of billions of dollars of investor money. And...
View ArticleOn Ireland’s bond success
I listed Ireland in two of my surprises for 2013. I wrote that Ireland’s government bonds do not outperform again. Greece outperforms this year. I also wrote that Ireland goes to OMT. The first...
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