Bank
bail-ins are back, and they begin in Austria - (www.examiner.com) Entering into 2016, all members of the European
Union (EU)
were required by law to have bail-in legislation on their books in preparation
for the next potential crisis that in previous times would have resulted in a
taxpayer funded bailout. This was accomplished both by individual countries,
and at the central bank level, and is regulated under the auspices of the European recovery and
resolution framework for banks.
And on April 10, it appears that these
new rules have come not a moment too soon asAustria is to become the first European state to
implement a bail-in as it induces the new policy on the failed Hypo Alpe Adria
(bank), which is known today as the Heta Asset Resolution AG when it was
nationalized by the Austrian government six years ago.
Wells Fargo Misjudged the Risks of Energy
Financing - (www.bloomberg.com) At its annual investor conference in San
Francisco in May 2014, with oil trading at $102 a barrel, Wells Fargo & Co.
boasted that in just two years it had almost doubled its energy exposure and
seized the title of Wall Street’s top oil and gas banker. The timing couldn’t
have been worse. Crude prices peaked a month later and have since plummeted to
$40. Wells Fargo has downgraded 38 percent of its energy loans and set aside
$1.2 billion to cover potential losses, according to company filings. The loans
are coming under increasing scrutiny from regulators and investors, even though
they make up only 2 percent of the bank’s portfolio. Wells Fargo’s foray
into oil shows how Wall Street misjudged the risks hidden in an esoteric type
of energy financing long thought to be bulletproof. To fuel the growth of its
energy desk, the bank targeted some of the least creditworthy borrowers in the
shale patch, offsetting the risk by demanding oil and gas as collateral. This type
of financing, known as reserves-based lending, was considered safe because
banks historically got back every penny they loaned, even after default,
according to a 2013 Standard & Poor’s report.
Banks Face Massive New Headache on Oil Loans - (online.wsj.com) The $147 billion question for banks: Will
energy companies max out their credit lines? When big banks announce earnings starting Wednesday, the spotlight will be on vast energy loans
that most investors didn’t know much about until recently. These unfunded loans
have been promised to energy companies, which haven’t yet tapped the money.
Many banks historically haven’t disclosed these loans, but began doing so
recently following the extended slide in prices for oil and gas. In the first
quarter, a handful of energy borrowers announced more than $3 billion of
drawdowns against these types of loans. Those commitments are expected to
trickle down to bank earnings and saddle firms with more energy exposure just
as they are trying to pare it back.
China Steelmaker Misses Third Bond Payment as
Defaults Spread - (www.bloomberg.com) Dongbei
Special Steel Group Co. defaulted on bonds a third time since its chairman was
found dead by hanging last month, adding to mounting debt nonpayments in China.
The maker of alloy steels used in machinery and car parts failed to fully pay
45.04 million yuan ($6.97 million) of interest due April 12 on its 5.63 percent
notes that mature in 2018, it said in a statement on Chinamoney’s website. The
firm, based in the northeastern city of Dalian, cited tight cash flow and said
it is raising money through various means. Chinese firms are struggling with
surging debt burdens as Premier Li Keqiang seeks to weed out zombie
corporations amid the country’s worst economic slowdown in a quarter-century.
At least seven firms have missed local note payments this year, already
reaching the tally for the whole of 2015.
What
in the World’s Going on with Banks this Week? Emergency Meetings, Summits,
Crashing EU Banks… - (www.wolfstreet.com)
Just about every major banker and finance
minister in the world is meeting in Washington, D.C., this week,
following two rushed, secretive meetings of the Federal
Reserve and another instantaneous and rare meeting between the Fed Chair
and the president of the United States. These and other emergency bank meetings
around the world cause one to wonder what is going down. Let’s start
with a bullet list of the week’s big-bank events:
·
The Federal Reserve Board of
Governors just held an “expedited special meeting” on
Monday in closed-door session.
·
The White House made an
immediate announcement that the president was going to meet with Fed Chair
Janet Yellen right after Monday’s special meeting and that Vice
President Biden would be joining them.
·
The Federal Reserve very
shortly posted an announcement of another expedited closed-door
meeting for Tuesday for the specific purpose of “bank supervision.”
·
etc.
Asian
Stocks Rise as Crude Rally Buoys Energy Shares, Yen Drops - (www.bloomberg.com)
Valeant shares fall on default fears - (www.cnbc.com)
Brazil's Rousseff decries conspiracy as impeachment advances - (www.reuters.com)
US budget deficit up sharply to $108 billion in March - (www.wtop.com)
How China’s fishermen are fighting a covert war in the South China Sea - (www.washingtonpost.com)
Chinese Scions’ Song: My Daddy’s Rich and My Lamborghini’s Good-Looking - (www.nytimes.com)
Valeant shares fall on default fears - (www.cnbc.com)
Brazil's Rousseff decries conspiracy as impeachment advances - (www.reuters.com)
US budget deficit up sharply to $108 billion in March - (www.wtop.com)
How China’s fishermen are fighting a covert war in the South China Sea - (www.washingtonpost.com)
Chinese Scions’ Song: My Daddy’s Rich and My Lamborghini’s Good-Looking - (www.nytimes.com)
Britain's Cameron
says he mishandled Panama Papers tax scrutiny - (www.reuters.com)
Italian banks' situation 'difficult but manageable': minister - (www.reuters.com)
ECB's policy must be 'proportionate' and respect rules: Mersch - (www.reuters.com)
Germany's Schaeuble says offshore companies must be transparent - (www.reuters.com)
Italian banks' situation 'difficult but manageable': minister - (www.reuters.com)
ECB's policy must be 'proportionate' and respect rules: Mersch - (www.reuters.com)
Germany's Schaeuble says offshore companies must be transparent - (www.reuters.com)
No comments:
Post a Comment