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Bankia Shares Suspended Ahead of Rescue Details - (www.reuters.com) Spain's Bankia is set to ask
the state for a more than 15 billion euros ($19 billion) bailout on Friday,
marking another rise in the cost of a drawn-out rescue of the country's
fourth-biggest bank. The capital shortfall at Bankia is
key to a wider funding gap in Spain's banking system, which some investors
believe could drive the euro zone's fourth-largest economy to seek
international aid — a move that would create fresh uncertainty around the whole
currency union. Spain is nationalizing Bankia, which holds some 10 percent of
the country's bank deposits, after it was unable to handle heavy losses from a
2008 property crash. The government insists the bank is a one-off case.
JPMorgan Gave Risk Oversight to Museum Head Who Sat on AIG
Board - (www.bloomberg.com) The three directors who oversee risk at JPMorgan Chase & Co. (JPM) include
a museum head who sat on American International Group Inc.’s governance
committee in 2008, the grandson of a billionaire and the chief executive
officer of a company that makes flight controls and work boots. What the risk
committee of the biggest U.S. lender lacks, and what the five next largest
competitors have, are directors who worked at a bank or as financial risk
managers. The only member with any Wall Street experience, James Crown, hasn’t been employed in the
industry for more than 25 years. “It seems hard to believe that this is good
enough,” said Anat Admati, a professor of
finance at Stanford University who
studies corporate governance. “It’s a massive task to watch the risk of
JPMorgan.”
Spain's Catalonia seeks government help to pay debt - (www.reuters.com) Spain's wealthiest autonomous region, Catalonia, needs financing help
from the central government because it is running out of options for
refinancing debt this year, Catalan President Artur Mas said on Friday. "We
don't care how they do it, but we need to make payments at the end of the
month. Your economy can't recover if you can't pay your bills," Mas told a
group of reporters from foreign media. A spokesman for the Catalan government
later emphasised that Mas was referring to payments that must be met routinely
each month and not a specific deadline this month. The debt burden of Spain's
17 highly devolved regions, and rising bad loans at the country's banks, are
both at the heart of the euro zone debt crisis because investors are concerned
they could strain finances so much that Spain, the currency bloc's fourth
biggest economy, will need an international bailout.
Red Flag in Bank Lending? - (online.wsj.com) Lending stumbled in the first quarter after nearly a year of growth,
deepening questions about the recovery and confidence of borrowers and bankers.
Loan balances fell by more than $56 billion, or 0.8%, in the quarter ended
March 31, according to the Federal Deposit Insurance Corp. The
quarter-over-quarter decline marks a reversal from three consecutive quarters
in which lending expanded. While lending to larger commercial and industrial
customers rose as it has for nearly two years, declines came in nearly all
other types of loans, including those to small businesses. "We're afraid
to expand right now," said Dan Thystrup, who owns Adventureglass, a
four-person company in North Webster, Ind., that builds fiberglass paddleboats
in the shape of swans, ducks and dragons. Mr. Thystrup said his reasons for
caution include sluggish demand and new environmental regulations.
In Spain, Bank Transfers Reflect Broader Fears - (www.nytimes.com) Ángel de la Peña, a Spanish government worker, is seriously considering
the once unthinkable: converting some of his savings from euros to British
pounds. Alvaro Saavedra Lopez, a senior executive for I.B.M. in Spain, says
many of his corporate counterparts across the country are similarly looking for
safer havens by transferring their spare cash to stronger euro zone countries
like Germany “on a daily basis.” It is only a trickle so far, and not nearly
enough to constitute a classic bank run. But these growing transfers of
deposits out of troubled Spanish banks reflect a broader fear that the
country’s problems could make it hard for Spaniards to get to their money if
banks fail and cannot be supported by the government. In a worst case, some
even worry their money will be worth substantially less if Spain is forced to
leave the euro currency zone and re-adopt its old currency,
the peseta.
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