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Banks to gulp half a trillion euros from ECB - (www.reuters.com) The European Central Bank will lend nearly half a trillion euros to banks at rock-bottom rates next week through its three-year refinancing operation, despite signs institutions already have adequate liquidity, Reuters polls showed on Monday. A poll of more than 60 economists showed a median expectation that the ECB will allot 492 billion euros ($647.6 billion) at 1 percent in the second of two 3-year loans on February 29. Forecasts, taken in the past few days, ranged from 200 billion to 1 trillion euros…….. Analysts and traders both generally agreed that the take-up of funds this month would be more of an insurance policy and to take advantage of an offer that is too good to be true. Indeed, only 15 of 63 analysts polled said banks would bid because they need the cash. "It is a one-time opportunity and a free lunch," said a money market trader, summing up a view expressed in several of the past few such polls.
Some Doubt a Settlement Will End Mortgage Ills - (www.nytimes.com) Even as government officials prepare to unveil new standards this week for how banks treat millions of Americans facing foreclosure, housing advocates and homeowners are skeptical the rules will be able to do something past efforts have not: provide a beleaguered borrower with one individual to help them navigate the mortgage maze. While the entire process of seeking a mortgage modification is complicated and time-consuming, few elements are as maddening as the inability to get through to a representative at the bank, or being asked for the same documents again and again. So the promise of a single point of contact has emerged as a crucial element in the much-ballyhooed $26 billion settlement reached earlier this month involving state attorneys general, the federal government and the five biggest mortgage servicers. These rules will apply nationwide and come with commitments of strong enforcement by federal and state authorities, but they carry a familiar ring for those experienced in the foreclosure process.
In Latest Greek Bailout, Warning Signs for Europe - (www.nytimes.com) European leaders have approved their latest aid package for Greece, raising hopes that the worst phase of the sovereign debt crisis is over and a persistent source of stress on global markets has been removed. But Greece’s 130 billion euro ($172 billion) bailout highlights the weaknesses in Europe’s response to the crisis, some analysts say. The worry is that these problems could flare up and undermine recovery efforts in countries like Italy, Spain, Ireland and Portugal. “I don’t want to be a Cassandra, but the idea that it’s over is an illusion,” said Kenneth S. Rogoff, a professor of economics at Harvard University and co-author of “This Time Is Different: Eight Centuries of Financial Folly.” “I am amazed by the short-term psychology in the market.”
Top Banks in EU Rush for Safety - (online.wsj.com) Top European banks, responding to new regulations and wary of lending, are stashing increasingly large sums of money at central banks around the world in a collective flight to safety. The eight giant European banks that have disclosed their annual results in recent weeks reported holding a total of about $816 billion in cash and deposits at central banks as of Dec. 31, according to calculations by The Wall Street Journal. That is up 50% from a year earlier, when the same banks were holding roughly $543 billion.
S&P :Funding is tight for Eurozone banks despite ECB loans - (www.reuters.com) As the first quarter of 2012 unfolds, the eurozone banking industry faces unfavorable funding conditions, despite a half trillion euros of three-year loans from the European Central Bank (ECB) at the end of 2011, Standard & Poor's Ratings Services noted in a report published today titled ECB Loans Reduce The Risk Of A Funding Crisis, But Won't Stop Banks From Reducing Loan Growth. We view the Long-Term Refinancing Operations (LTRO) as an extraordinary emergency relief measure that reduces the risk of a funding crisis. Since the operation, wholesale term debt markets have opened, and borrowing conditions have eased. While these developments are positive, we believe, the ECB action in itself illustrates weaknesses in the eurozone banking industry's funding profile.
Greece Wins Second Bailout as Europe Picks Aid Over Default - (www.bloomberg.com)
Banks, Insurers Likely to Participate in Greek Swap After Past Writedowns - (www.bloomberg.com)
Draghi Stays Silent on ECB Role in Greek Bailout - (www.bloomberg.com)
New Bailout Is a Reprieve for Greece, but Doubts Persist - (www.bloomberg.com)
Eurozone agrees second Greek bail-out - (www.ft.com)
Canadian Economy Suffers From Dollar Parity - (www.bloomberg.com)
Fed Writes Sweeping Rules From Behind Closed Doors - (online.wsj.com)
Food price increases hurt U.S. sales - (www.reuters.com)
Wal-Mart Profit Trails Estimates on Low Prices - (www.bloomberg.com)
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