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STORIES:
European Banks Stash Their Cash - (www.online.wsj.com) Some of Europe's biggest banks are increasingly hoarding their cash at
central banks, anxious the continent's crisis could intensify and leave them
with bigger problems. At the end of March, 10 of Europe's biggest banks had
parked a total of nearly $1.2 trillion of cash at central banks around the
world, according to an analysis by The Wall Street Journal of bank disclosures.
The total is $128 billion higher, or a 12% jump, since December and up 66% from
the end of 2010. After a three-month thaw earlier this year, bank-funding
markets are showing signs of another freeze. European banks that deposit their
money at central banks rather than lend it to customers or use it for other
purposes are ensuring they have ready access to funds if they encounter trouble
refinancing their debts or if other emergencies prompt customers to withdraw
large amounts of money, such as credit-rating downgrades.
The
Violent, Scandalous Origins of JPMorgan Chase - (www.bloomberg.com) Americans like to imagine that the Founding Fathers were virtuous and
civic-minded giants bestriding the continent. But many of them kept a sharp eye
on the main chance, alert to opportunities for personal profit. The birth of
the mega-bank JPMorgan Chase
& Co. (JPM) may be traced to two such figures: Aaron Burr,
the dark star of America’s early years, and his longtime nemesis, Alexander Hamilton, the first secretary of the
Treasury. In the 1790s, New York was emerging
as the nation’s commercial center, but it had only two banks: the Bank of New
York and a branch of the Bank of the United States. Both were dominated by wealthy
Federalist merchants. Republicans such as Burr often found the banks’ credit
windows closed tightly against them. A gifted lawyer, Burr pondered the problem
at length. A new bank would require a formal charter from the New York
legislature. Controlled by Federalists, the legislature would never knowingly
approve a bank that would benefit Burr and his allies.
Spanish Banks Resist Idea of 'Bad Bank' Bailout - (www.nytimes.com) As investors raise the pressure on Spain to clean up its banking sector, some of the
largest and healthiest financial institutions in the country are fretting over
the impact that a bailout would have on their own valuations. In recent days,
the conservative government of Prime Minister Mariano Rajoy and the Bank of
Spain have been studying whether to allow banks to transfer toxic assets to a
state asset management company, along the lines of the government-backed agency
that Ireland set up for its troubled banks in late 2009. The exact structure
and size of such a transfer is being debated, as well as whether it would be
guaranteed by Spain, or would need to be bolstered by rescue funds from
international lenders, as part of a broader recapitalization of the Spanish
banking sector.
Exclusive: Greece's Democratic Left refuses to join bailout
alliance - (www.reuters.com) Greece's Democratic Left party refuses to join any pro-bailout coalition
of the conservative New Democracy and Socialist PASOK parties, its leader,
Fotis Kouvelis, told Reuters on Monday. The moderate leftist party, which
picked up 6.1 percent of the vote in Sunday's election, had been seen as the
two traditional ruling parties' best hope for a coalition partner among the
five anti-bailout parties that entered parliament. "We rule out
participating in a PASOK-New Democracy government," Kouvelis told Reuters
after a party meeting to decide the group's strategy. "We would
participate in a coalition government with other progressive forces," he
said, referring to other leftist parties which together do not have enough
parliamentary seats to obtain a majority.
Bank of Spain, government prepare Bankia plan: source - (www.reuters.com) Spain is set to announce a rescue plan for ailing bank Bankia SA (BKIA.MC) as part of a wider
reform of the deeply troubled banking sector, whose woes threaten Spain's
financial stability and the euro zone as a whole, sources said on Monday. The reform
of Bankia, saddled with huge toxic loans which put it at the heart of Spain's
banking crisis, will include cash injections and a management shakeout, a
government source and another source said. The lender is run by Rodrigo Rato, a
former minister for the ruling centre-right People's Party. However the sources
declined to confirm reports Bankia - an agglomeration of local banks or
"cajas" - would need as much as 10 billion euros ($13 billion) in
capital, and it was not clear how the government, struggling to reduce its
deficit, will raise the money.
