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Blow for ECB as wider loan rates hit south - (www.ft.com) Divergences
across the eurozone in interest rates paid by businesses on bank loans have
reached record highs, despite European Central Bank action to prevent Europe’s
monetary union fragmenting. Widening differences in borrowing costs, shown in
an analysis by Goldman Sachs, highlight how ECB measures have prevented a
catastrophic eurozone break-up – but failed to ease crippling credit conditions
in much of the region’s southern periphery, where economic growth prospects
remain bleak. Since mid-2012, the spread between yields on Spanish and Italian
sovereign 10-year debt and the German equivalent has narrowed significantly.
Goldman Sachs’ interest rate divergence indicator – measuring cross-border
variations in interest rates charged by eurozone banks on a variety of business
loans – also dipped initially.
The
Bailout Of Cyprus Was Another Big Win For Hedge Funds - (www.businessinsider.com) Restructuring
experts Lee Buchheit of Cleary Gottlieb and Mitu Gulati of Duke Law School put it this way: Cypriot
sovereign bonds will emerge unscathed. The next bond maturing on June 3,
2013 in the amount of €1.4 billion – a large chunk of which is reputed to
have been bought by international hedge funds over the last six months
at prices ranging from 70-75 cents on the euro – will be paid out at 100
cents on the euro in about ten weeks. Hedge funds luck out in this case. They
own "around half" of the June 2013 bonds, according to IFR reporters Natalie
Harris and John Geddie (emphasis added): According to market
sources, around half of the June 2013 bond is owned by hedge funds, but
while its price has fallen by around seven points this week, a restructuring of
Cyprus' EUR4bn sovereign debt is not on the table. The decision to spare
sovereign bondholders and shift the burden to private creditors (uninsured
depositors, in the case of Cyprus) has been heralded as a new "approach"
to dealing with euro zone bailouts by Dutch finance minister Jeroen
Dijsselbloem, who currently serves as President of the Eurogroup of
euro zone finance ministers (the instrumental EU apparatus for negotiating
bailouts with member states).
Little Cyprus thumbs its nose at EU 'bullies' - (finance.yahoo.com) The moment word broke that Cypriot lawmakers in Parliament had voted
down a bailout deal that would have raided everyone's savings to prop up a
collapsing banking sector, a huge cheer rose up from hundreds of demonstrators
gathered outside that echoed through the building's corridors. Many relished it
as a kind of David-against-Goliath moment — a country of barely a million
people standing up to the will of Europe's behemoths who wanted it to swallow a
very bitter pill to fix its broken-down economy. "Shame on Europe for
trying to snatch people's savings. It's a mistaken decision that will have
repercussions on other economies and banking systems," said protester
Panayiotis Violettis. "People have stopped trusting the EU which should be
our protector."
Russia won't help out Cyprus depositors, says minister - (www.reuters.com) The Russian government will not aid businesses that have lost money in
Cyprus, First Deputy Prime Minister Igor Shuvalov said, underscoring Moscow's
resolve to clamp down on the flight of capital to offshore financial centers. Major
account holders, many of them Russian, will lose up to 60 percent of their
deposits over 100,000 euros ($128,400) at Cyprus's largest bank under a
European Union bailout to save the Mediterranean island from bankruptcy. If Russians
lose money "it's a terrible shame, but the Russian government will not
take any action in such a situation," Shuvalov was quoted by the Interfax
news agency as saying in a television interview on Sunday night. But if a large
company, in which the Russian state was a shareholder, sustained serious losses
then this could be reviewed on a case-by-case basis, Shuvalov added.
Fannie Mae and Freddie Mac Face New Problem: Profitability -
(www.bloomberg.com) The prospect of steady profits at U.S.-owned mortgage financiers Fannie Mae (FNMA) and
Freddie Mac is complicating legislative efforts to shrink the federal role in
securitizing home loans. Fannie Mae executives
are due this week to release the company’s earnings report for the last quarter
of 2012, a filing delayed by an unanticipated problem: The Washington-based
mortgage financier is making money and expects to remain steadily profitable. Fannie
Mae and McLean, Virginia-based Freddie Mac (FMCC), once
thought to be the only financial-crisis bailout recipients that would generate
a net loss for taxpayers, are poised to begin funneling healthy quarterly
revenue back to the U.S Treasury as the housing market rebounds. The reversal
of fortune is creating political and administrative headaches in Washington, where few expected the turnaround
and the future of mortgage financing remains undecided. “The good news is
they’re actually starting to make money again,” Senator Mark Warner, a Virginia
Democrat, said in an interview on “Capitol Gains” with Bloomberg Television’s Peter Cook that aired March 24. “Bad news
is if they make too much money, there may be a sense of, ‘Well, let’s not mess
with them anymore.’ We need housing finance reform.”
Cyprus details heavy losses for major bank customers - (www.reuters.com)
Bank of Cyprus big savers to lose up to 60 percent - (finance.yahoo.com)
Cyprus bank controls to last a month, minister says - (www.reuters.com)
Bank of Cyprus big savers to lose up to 60 percent - (finance.yahoo.com)
Cyprus bank controls to last a month, minister says - (www.reuters.com)
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