October 27, 2011
JLN Interest Rates - http://www.jlninterestrates.com
Conversation Starter
ISDA Updates Greek Sovereign Debt Q&A
TheInternational Swaps and Derivatives Association, Inc. (ISDA) today announced that following recent events related to the restructuring of Greek sovereign debt, it has updated its Greek sovereign debt Q&A. The document, which can be accessed at the ISDA website includes responses to the most frequently asked questions regarding the application of credit default swaps contracts in Greek sovereign debt. It outlines the triggers for credit events, the process for determining a credit event and the current amount of CDS notional outstanding on Greek sovereign debt.
See ISDA's full Q&A here.
DTCC RELEASES SEPTEMBER REPORTS ON MARKET ACTIVITY FOR ANNUITY PRODUCTS
The Depository Trust & Clearing Corporation (DTCC) Insurance and Retirement Services (I&RS) released September reports on activity in the market for annuity products from its Analytic Reporting for Annuities online information service, which is based on the transactions that DTCC processes for the industry. According to DTCC I and RS:
* Inflows for all annuity types processed in September declined by 19 percent to $6.7 billion from $8.3 billion in August.
* Annuity inflows were at their highest so far this year in March, at nearly $8.8 billion.
* The top 10 insurance companies accounted for over 68 percent of all inflows processed in September.
* Quarterly inflows and net flows have shown only slight changes since the beginning of the year.
See the full reports here.
--Christine Nielsen
Lead Stories
EU agrees debt deal; 50% Greek debt haircut
By Sarah Turner, MarketWatch
European leaders announced a deal early Thursday in which private investors in Greek government debt will take a 50% writedown on the value of their holdings as part of a wide-ranging package of measures designed to stem the euro-zone debt crisis.
http://jlne.ws/rITyDG
Europe crafts debt deal, banks take losses on Greek debt
Associated Press
European leaders clinched a deal Thursday they hope will mark a turning point in their two-year debt crisis, agreeing after a night of tense negotiations to have banks take bigger losses on Greece's debts and to boost the region's weapons against the market turmoil.
http://jlne.ws/tH9iZt
Bigger Haircuts Would Make Greek CDS Trigger More Likely
By Katy Burne Of DOW JONES NEWSWIRES
The bigger the loss, or "haircut," that European officials force private investors to take on Greek bonds, the more likely it is that an aggressive restructuring of the nation's debts will trigger payouts on the $3.7 billion of credit default swaps tied to its bonds, analysts said Wednesday. The key is whether the sacrifice European policy makers demand of private creditors in exchange for a Greek bailout will be so great that some investors refuse to accept the deal voluntarily.
http://jlne.ws/rAHxOe
Don’t expect Mario Draghi to save the euro
By Matthew Lynn, MarketWatch
First things first. Can everyone agree — and headline writers in particular — that once Bank of Italy Gov. Mario Draghi takes over as the new president of the European Central Bank next month, there aren’t going to be any references to Super Mario. Or to fixing the plumbing.
http://jlne.ws/uAIrzu
Confusion over Greek CDS continues
http://jlne.ws/vZlAKn
EU bids to slash Greek debt by third
FT.com
http://jlne.ws/s54D2I
Hard line adopted on Greek debt loss
By Peter Spiegel in Brussels, Gerrit Wiesmann in Berlin and Hugh Carnegy in Paris, Financial Times
European negotiators have asked Greek debt holders to accept a 60 per cent cut in the face value of their bonds, a hardline stance that far exceeds losses agreed in a deal between private investors and eurozone authorities three months ago.
http://jlne.ws/tr7V7Q
Economists: EFSF Not Enough to Relieve Italy Fears
By Ulrike Dauer, WSJ.com
Now the next game begins. Even before the ink is dry on a deal to cut Greece’s debt and put up a firewall against financial contagion in Europe, leading economists fear the rescue package may be too little too late to keep Italy out of the crosshairs of financial markets and open the next battle in the struggle to save the euro.
http://jlne.ws/tvQi0C
Incoming ECB President Draghi Sees ‘Significant’ Economic Risks
FT.com
http://jlne.ws/sSmGOb
ECB Said to Consider Increasing Loans for Collateral Disclosure
BusinessWeek
The European Central Bank is considering lending more money against asset-backed securities where issuers provide additional information about the loans securing the bonds, said a person familiar with the matter.
http://jlne.ws/nVMoOa
Treasury to lobby EU on Mifid plans
http://jlne.ws/vJfvAu
Mifid’s net cast wide to overhaul Europe trading
By Jeremy Grant and Alex Barker, Financial Times
If anyone were in any doubt about how Europe is approaching reform of financial markets after a year in which an alphabet soup of proposals has been floated, EU internal markets commissioner Michel Barnier was clear on Thursday. Speaking as the European Commission published its “Mifid II” proposals, the Frenchman said they were “a complete overhaul of the way financial markets operate in Europe”.
http://jlne.ws/n9Avo1
Mifid II proposals: early reaction
FT Finance News (ext) via Yahoo! Finance
A round-up of the initial reactions from market participants to the publication of the proposals to update the Mifid directive governing European financial markets
http://jlne.ws/nKENdV
Sarkozy Said to Plan Plea for China Investment to EU Rescue Fund
By Jonathan Stearns and Helene Fouquet, Bloomberg
French President Nicolas Sarkozy plans to call Chinese leader Hu Jintao tomorrow to discuss China contributing to a fund European leaders may set up to bolster its debt-crisis fight, said a person familiar with the matter.
http://jlne.ws/vtROJ6
Treasury Eyes First New Debt Type Since TIPS
By Liz Capo McCormick, Bloomberg
The U.S., seeking to attract investors who might otherwise avoid Treasuries amid a $1.3 trillion budget deficit, is considering the sale of floating- rate notes in what would be its first new security since it began offering inflation-linked debt 14 years ago.
http://jlne.ws/nh7Kho
**CN: The hope is that the securities would increase demand from banks, pension funds, insurers and individual investors, while reducing the government’s dependence on foreign buyers.
U.S. rating likely to be downgraded again
By Walter Brandimarte, Reuters
The United States will likely suffer the loss of its triple-A credit rating from another major rating agency by the end of this year due to concerns over the deficit, Bank of America Merrill Lynch forecasts.
http://jlne.ws/roA4op
Twelve Questions on Obama’s Plan to Expand the Home Affordable Refinance Program
By Nick Timiraos, WSJ.com
The Obama administration is revamping a program that’s designed to let more homeowners refinance their mortgages even if they don’t have any equity
http://jlne.ws/oVZWfY
Vatican calls for global authority on economy
The Vatican called on Monday for the establishment of a "global public authority" and a "central world bank" to rule over financial institutions that have become outdated and often ineffective in dealing fairly with crises.
http://jlne.ws/pMRwEI
Economics focus: Unrest in peace
The Economist
AFTER two decades of stable growth and mostly quiet streets the rich world has become an unruly place. Hundreds of protesters have been camped in New York’s financial district since September, inspiring similar movements in large cities around the world. In Rome the protests turned violent as demonstrators set cars alight and hurled rocks at police
http://jlne.ws/nGDsnP
Higher Fannie, Freddie Loan Limits — Back From the Dead?
By Alan Zibel and Nick Timiraos, WSJ.com
A push by the real estate industry to restore higher limits on the size of government-backed loans is starting to have some results. But the outcome is far from certain. Around 11:30 p.m. on Thursday night, the Senate voted 60-38 to approve an amendment to a federal spending bill that would raise the maximum size of loans that can be guaranteed by government-controlled mortgage companies Fannie Mae, Freddie Mac and the Federal Housing Administration.
http://jlne.ws/pzEfjD
Global Financial Regulation: A Goal Many Espouse But Can It Be Done?
By Ron Synovitz, Eurasia Review
Calls for a more coordinated system of international financial regulation have been growing as the Occupy Wall Street protests in New York inspire similar demonstrations around the world.
http://jlne.ws/ra9RT3
US Running Out Of Time To Meet Basel 2.5 Deadline
By Katy Burne, DOW JONES NEWSWIRES
The clock is ticking for U.S. banking regulators trying to meet a year-end deadline for ensuring bigger capital buffers at the blogspot firms they oversee. The Basel Committee on Banking Supervision issued a progress report Tuesday on the efforts under way by regulators in nearly 30 jurisdictions to overhaul minimum capital requirements of their domestic banks.
http://jlne.ws/ri7JtM
Visa, MasterCard Looking Into Online Targeted Advertising Using Credit-Card Data
BY EMILY STEEL, WSJ.com
The two largest credit-card networks, Visa Inc. and MasterCard Inc., are pushing into a new business: using what they know about people's credit-card purchases for targeting them with ads online.
http://jlne.ws/s7YkBa
Wall Street Protesters Turn Focus on City Halls
Bloomberg
Advocates for the poor are using the Occupy Wall Street protests in city halls to push municipalities to divest from banks blamed by demonstrators for the global financial crisis and persistent unemployment in its wake.
http://jlne.ws/vDyF8I
NY Fed's $40 Billion Iraqi Money Trail
By Eamon Javers, CNBC
It has been called the largest airborne transfer of currency in the history of the world. But finding out what happened to all the money involved has become one of the biggest financial mysteries of all time.
http://jlne.ws/sALR0Q
Events
Markets DeMystified: OTC vs. Exchange-Traded Derivatives
November 2, 2011
Event focused on OTC and exchange-traded derivative products
http://jlne.ws/up5eVM
International Banking Conference 2011
November 10 - November 11, 2011
Banking conference with a global focus
http://jlne.ws/ow1CVU
Fourteenth Annual International Banking Conference
November 29 - December 1, 2011
Federal Reserve Bank of Chicago holds 14th International Banking Conference
http://jlne.ws/nTDrKO
7th Annual FIA Asia Derivatives Conference
November 29 - December 1, 2011
FIA looks at the futures and options industry in Asia
http://www.futuresindustry.org/asia-2011.asp
Economic News
Pending Sales of U.S. Existing Homes Fall 4.6%
By Bob Willis, Bloomberg
The number of contracts to purchase previously owned U.S. homes unexpectedly fell in September as lower prices and borrowing costs failed to support demand.
http://jlne.ws/usAr0e
New home sales rise in September, prices fall
Reuters
New single-family home sales rose at their fastest pace in five months in September, a government report showed on Wednesday, but sustained price declines indicated the housing market is far from recovery.
http://jlne.ws/s7s1qD
Annual Rates of Change Continue to Improve According to the S&P/Case-Shiller Home Price Indices
Data through August 2011
Released today by S&P Indices for its S&P/Case-Shiller1 Home Price Indices, the leading measure of U.S. home prices, showed increases of +0.2% for the 10- and 20-City Composites in August versus July.
http://jlne.ws/uL7Yi2
Jobless claims fall 2,000 to 402,000
By Greg Robb, MarketWatch
First-time claims for state unemployment benefits fell slightly in the latest week, the Labor Department reported Thursday. The number of initial claims in the week ending Oct. 22 fell 2,000 to 402,000.
http://jlne.ws/v6pK0u
Chicago Fed index on U.S. economy improves
By Nick Timiraos, WSJ.com
The Obama administration is revamping a program that’s designed to let more homeowners refinance their mortgages even if they don’t have any equity. This isn’t a new program, but instead attempts to turbo-charge an existing federal initiative called the Home Affordable Refinance Program.
http://jlne.ws/mRVxYk
U.S. GDP grew 2.5 percent in 3rd Quarter
http://jlne.ws/t3eEdq
US consumer spending: Hard times
The Economist
AMERICANS are spending less on clothes and eating out and more on household fuel bills and healthcare, according to data from the Bureau of Labour Statistics. Between 2007 and 2010, average annual consumer spending per unit—defined as a family/shared household or single/financially independent person—fell by 3.1% to $48,109.
http://jlne.ws/tC8ry3
Consumer Confidence Falls to Two-Year Low
http://jlne.ws/utDc0K
Richmond Fed manufacturing index fell for fourth consecutive month in Oct
http://jlne.ws/tUxRNn
Number of failed banks in U.S. hits 83 for the year
Associated Press
Regulators have closed two small banks in Georgia and one in Florida, raising to 83 the number of U.S. banks that have failed this year.
http://jlne.ws/qH84j9
**CN: But who's counting.
Firms & Banks
Broadway Technology Expands its Austin Headquarters
Broadway Technology, LLC, the emerging leader in high-performance trading solutions for top-tier global banks and hedge funds with dual headquarters in New York and Austin, announced today that it has moved its Austin office to a new 8,300 square feet location overlooking five acres of lakeside property on the shores of Lake Austin.
http://jlne.ws/rJjQ6S
With $160 billion support, Lehman sees bankruptcy end
Reuters via Yahoo! News
Lehman Brothers Holdings Inc said its reorganization plan has the backing of creditors who hold more than $160 billion of claims, and believes it has won enough support to end its record bankruptcy.
http://jlne.ws/tpqQWn
Tough Week for MF Global
By Joseph Griesbeck, CFA - Editor, Ownership Intelligence/ Reuters
This week is not going as planned for US broker-dealer MF Global (MF-N). On Monday, ratings agency Moody’s downgraded it to Baa3, one notch above junk, due to its exposure to European debt, and the shares closed down 3.5%
http://jlne.ws/uq0tqv
MF Global’s Quarterly Loss Widens on Tax, Restructuring Charges
By Matthew Leising, Bloomberg Businessweek
MF Global Holdings Ltd., the futures broker that had its credit rating cut yesterday to the lowest investment grade, said its quarterly loss widened on charges tied to deferred tax assets and a restructuring.
http://jlne.ws/vC8hpH
Bove: Goldman May Get ‘Windfall’ If It Buys MF
By Laura Marcinek, Bloomberg
Goldman Sachs Group Inc. is among firms that could gain by buying part or all of MF Global Holdings Ltd., said Richard Bove, an analyst at Rochdale Securities LLC.
http://jlne.ws/tPoNKt
As UBS Shrinks, What of Its Asian Operations?
Wall Street Journal Blogs
As UBS prepares to shrink its investment bank, the key question is what happens to its successful Asian business.
http://jlne.ws/q7wxT9
A New UBS Boss Just Took Over, And Word Is He's Slashing Tons Of Jobs
Business Insider
Less than a month as UBS's interim chief, Sergio Ermotti is planning to slash the size of the investment banking division following the rogue trading scandal that cost the embattled Swiss bank $2.3 billion, the WSJ reported.
http://jlne.ws/nvZulE
Deutsche Bank unit BHF to cut 270 jobs-sources
Reuters Company Finance News via Yahoo! Finance
Deutsche Bank AG (DBKGn.DE: Quote , Profile , Research , Stock Buzz )unit BHF told staff it will shed 270 jobs, two sources close tothe bank said, as the parent company struggles ...
http://jlne.ws/nlO0uq
No Joke: Times Getting Tough for U.S. Bankers
BY FRANCESCO GUERRERA, WSJ
At a charity dinner in New York last week, private-equity titan Stephen Schwarzman couldn't resist drawing a parallel between Brian Moynihan, Bank of America Corp.'s chief executive, and his brother, Patrick Moynihan, a deacon and missionary. "Patrick runs a Catholic boarding school in Haiti," the head of Blackstone Group L.P. told a Waldorf Astoria ballroom packed with the likes of Mayor Michael Bloomberg, New York Gov. Andrew Cuomo and assorted Wall Street powerbrokers. "Their parents must be so proud to see two of their boys each running an underfunded, nonprofit, organization."
http://jlne.ws/ubWS5W
In Cautious Times, Banks Flooded With Cash
By ERIC DASH and NELSON D. SCHWARTZ, NY Times
Droves of consumers and businesses unnerved by the lurching markets have been taking their money out of risky investments and socking it away in bank accounts, where it does little to stimulate the economy.
http://jlne.ws/rXilFH
What Is a Banker Worth? Here Is One Answer
By KEVIN ROOSE, NY Times
It has been argued in certain circles that Wall Street is worthless. Unproductive. Devoid of social value. Luckily, thanks to a new Web site, bankers losing sleep wondering about their usefulness can find out exactly how much they’re worth.
http://jlne.ws/n5YU4z
Capital One Profit Tops Estimates as Fewer Borrowers Default
BusinessWeek
Capital One Financial Corp., the credit-card issuer seeking approval to purchase ING Groep NV's U.S. online bank, said profit advanced 1.3 percent as lending increased and fewer borrowers defaulted.
http://jlne.ws/pFgMxb
Merrill Lynch’s derivatives set sail for safe harbors
By Lisa Pollack, FT.com
Over the last week, news outlets and bloggers have discussed Bank of America’s move to shift derivatives exposures from its Merrill Lynch unit to its deposit-taking, FDIC-insured bank.
http://jlne.ws/tN05rB
Fifth Third Flies: Financial Winner
TheStreet.com
Fifth Third Bancorp was the big winner on a strong Thursday for most U.S. financials, with shares rising over 9% to close at $11.63. The Cincinnati lender beat third-quarter earnings estimates with a profit of 40 cents a share, which was a 14% improvement over the second quarter.
http://jlne.ws/qjpVfa
Bond-Fund Stars Fall as Bets Backfire, but They Fight On
By MIN ZENG, WSJ.com
It's been a tough year for bond-fund stars. Longtime outperformers in mutual-fund rankings Dan Fuss, co-portfolio manager of the Loomis Sayles Bond Fund at Loomis Sayles & Co, and Michael Hasenstab, portfolio manager of Templeton Global Bond Fund and co-director of Franklin Templeton Fixed Income Group's international bond department, were tripped up by a surprising bull run in the safe-haven U.S. Treasury bonds and a bearish turn in emerging-market bonds during the third quarter.
http://jlne.ws/mSFtnl
Banks must find E108bn in new capital
By Alex Barker, Financial Times
Europe’s big banks will be forced to find E108bn of fresh capital over the next six to nine months under a deal to strengthen the banking system that is to be unveiled by European Union leaders.
http://jlne.ws/pKyKn2
Central bankers must update outdated analytical toolkit
By Gillian Tett, Financial Times
Eight years ago, Claudio Borio, a senior economist at the Bank for International Settlements, co-authored a paper which warned that the world’s financial system was spinning out of control, due to excess in the complex credit world. At the time, the paper was largely ignored, if not derided by many senior policymakers. But now it looks prescient; so much so, in fact, that Borio and his co-author, Bill White (who also used to work at the BIS), are some of the few economists who have emerged from the recent financial crisis with their reputations intact.
http://jlne.ws/nKh2zM
Banks pay out guaranteed bonuses despite ban
By Megan Murphy in London - Financial Times
Investment banks are exploiting gaps in global pay reforms to persist with some of their most contentious practices, including guaranteeing lucrative bonuses to employees regardless of their performance, industry data show.
http://jlne.ws/nVeCle
Regulators
Volcker defends his ‘rule’ from critics
By Tom Braithwaite in New York, Financial Times
Paul Volcker has not been marching at “Occupy Wall Street” but he is likely to have a greater impact on the financial sector than the sleeping-bagged masses in New York’s Zuccotti Park.
http://jlne.ws/txNbhK
Analysis: Volcker pay curbs spark fears of Wall St. exodus
Reuters via Yahoo! News
The Volcker rule has created a new battlefield over Wall Street pay that banks fear will send their star traders and hedge fund advisers fleeing.
http://jlne.ws/u9ota4
So Much for the Volcker Rule
Even in 298 pages, regulators can't decide what to regulate.
WSJ
If you tried to write a parody of the uncertainty and confusion triggered by federal rule-making, it would be hard to top the latest proposal from Washington's financial regulators. So here's an ironic hat tip to the bureaucrats who wrote the draft Volcker Rule, which will allegedly limit risk-taking at financial firms backed by taxpayers.
http://jlne.ws/oL9xj1
Kocherlakota backs doves on Fed communications
By Ann Saphir, Reuters
A prominent Federal Reserve policymaker who has fought recent monetary policy easing signaled his support Friday for a proposal from a dovish colleague to tie policy to specific economic goals.
http://jlne.ws/oBRD2H
Speech By SEC Chairman Mary Schapiro: Opening Statement At SEC Open Meeting: Private Fund Systemic Risk Reporting
Press Release
http://jlne.ws/snKHJo
Speech By SEC Commissioner Troy A. Paredes: Statement At Open Meeting To Adopt Form PF
Press Release
http://jlne.ws/tuXmlw
Speech By SEC Commissioner Elisse B. Walter: Remarks Before The SIFMA Compliance And Legal Fall Seminar
Press Release
http://jlne.ws/sd8rtq
SEC orders FINRA to improve internal compliance policies and procedures
By Ulrike Dauer, WSJ.com
http://jlne.ws/sylc3v
Wetjen Formally Joins CFTC to Complete Dodd-Frank Swaps Rules
http://jlne.ws/tWxVqk
Senate confirms Mark Wetjen as new CFTC commissioner
FuturesMag.com
The U.S. Senate confirmed three presidential nominees for financial regulator posts last night in a voice vote. Lawmakers approved Daniel M. Gallagher and Luis A. Aguilar as SEC commissioners, and Mark P. Wetjen was approved to serve as a CFTC commissioner.
http://jlne.ws/p8uoYq
FIA statement on Senate confirmation of Mark Wetjen as CFTC Commissioner
Press Release
The FIA congratulates Mark Wetjen on the Senate's decision to confirm his nomination to serve as a CFTC Commissioner. Mr. Wetjen has assured Congress that he will listen to all viewpoints and gather the requisite information before reaching a decision on the many complex regulatory issues facing the agency.
http://jlne.ws/9txwjC
Financial Regulators Approved by Senate to Play Dodd-Frank Roles
By Jesse Hamilton, Bloomberg
The U.S. Senate confirmed three of President Barack Obama’s nominees for financial-regulator posts, including additions to the Securities and Exchange Commission and Commodity Futures Trading Commission who will have a say in Dodd-Frank Act rulemaking.
http://jlne.ws/psrPD4
Speech By Federal Reserve Vice Chair Janet L. Yellen At The 2011 Annual Meeting Of The Financial Management Association International, Denver, Colorado On The Outlook For The U.S. Economy And Economic Policy
Press Release
http://jlne.ws/oqjkcU
Fed’s Yellen: QE3 May Be Warranted
By Scott Lanman and Jennifer Oldham, Bloomberg
Federal Reserve Vice Chairman Janet Yellen said a third round of large-scale securities purchases might become warranted if necessary to boost a U.S. economy challenged by unemployment and financial turmoil.
http://jlne.ws/qAD7CK
Yellen: Fed has some options on forward guidance
By Greg Robb, MarketWatch
The Federal Reserve is considering more than one way to give greater insight to financial markets on how shifts in the economic outlook could impact the central bank's decision to hold short-term interest rates at zero, Federal Reserve Vice Chairman Janet Yellen said Friday.
http://jlne.ws/rnJell
FRB's Richard Fisher: Remarks before the Dallas Friday Group
It has been decades since I was an active member of this prestigious forum. Last night, I attended a book party for Kathryn McGarr, Cappy McGarr and Janie Strauss McGarr’s daughter. She has written a zinger of a book about her mother’s uncle, Bob Strauss, one of our most accomplished and colorful public servants.
http://jlne.ws/oyFbA0
BOE Tucker: Clear Exchange-Traded Derivatives Centrally
Jason Douglas, Dow Jones Newswires
Transactions involving exchange-traded derivatives ought to be cleared through central counterparties, Bank of England policy maker Paul Tucker said Monday.
http://jlne.ws/nz0Irv
OTC
Chicago Mayor Stumps For Trading Firms In Swap Market Revamp
By Jacob Bunge and Katy Burne Of DOW JONES NEWSWIRES
Mayor Rahm Emanuel is barnstorming for Chicago trading firms that are vying for new business created by the financial markets law he helped push through the U.S. Congress. Emanuel in late September traveled to Washington, where he discussed the rulemaking under the Dodd-Frank financial law with the head of the Commodity Futures Trading Commission. His message: Don't shackle Chicago's small, trading-focused companies with rules designed to rein in the derivatives desks of large and interconnected dealer banks, according to people present at the meetings.
Global News
London Banking Jobs May Fall to 1998 Levels
Bloomberg
Employment in London's financial- services industry this year may plummet to its lowest level in more than a decade on concern about the European sovereign debt crisis, tougher regulation and higher taxes, the Centre for Economics & Business Research Ltd. said.
http://jlne.ws/rBTW0o
Italians, Greeks skeptical over euro zone rescue plan
By Catherine Hornby, Reuters
A deal struck by euro zone leaders on Thursday to contain the region's dangerous debt crisis was greeted skeptically by onlookers in the two countries most in the firing line, Greece and Italy, with some saying politicians were dreaming.
http://jlne.ws/vrKqD2
Greek Collateral Key to Averting Default in Swap: Euro Credit
Bloomberg
Europe's efforts to persuade bondholders to forgo part of their Greek loans without triggering a default hinge on how write downs are twinned with the provision of top-rated collateral.
http://jlne.ws/mVZ8Tz
Troika Says Greek Debt Not Sustainable
BY WILLIAM BOSTON AND ANDREAS KISSLER, WSJ.com
A massive restructuring of Greek debt that will mean a deeper cut for private-sector investors looks a lot more likely after the so-called troika of international inspectors concluded in a report that Athens' public-sector debt load is unsustainable.
http://jlne.ws/rm1hwc
China welcomes consensus reached at EU debt talks
By Chris Buckley and Ben Blanchard, Reuters
China welcomed on Thursday the consensus reached at the European Union's summit to tackle the euro zone debt crisis and supported measures taken by the bloc that could help the region's recovery.
http://jlne.ws/sla0GL
Merkel Cements EU Leadership as She Seeks to Win Back Voters
By Leon Mangasarian and Patrick Donahue, Bloomberg Businessweek
Chancellor Angela Merkel emerged from 10 hours of negotiations in Brussels with a plan to stem the debt crisis that might as well have been written in Berlin.
http://jlne.ws/vFgoFE
Merkel rebuffs Sarkozy on euro zone solution
By Annika Breidthardt and Daniel Flynn, Reuters
Private holders of Greek debt may need to accept losses of up to 60 percent on their investments if Greece's debt mountain is to be made more sustainable in the long-term, a downbeat analysis by the EU and IMF showed on Friday.
http://jlne.ws/n5mRr4
German Lawmakers Approve Broadened EFSF
BY WILLIAM BOSTON, BEATE PREUSCHOFF AND ULRIKE DAUER, WSJ.com
As a blockbuster deal to resolve the spreading euro-zone debt crisis eluded European leaders on Wednesday, German Chancellor Angela Merkel and the swooning euro currency got a boost when German lawmakers backed a resolution approving leveraging models for the euro zone's bailout fund.
http://jlne.ws/u1iIs6
German, French Business Confidence Falls
BY MARGIT FEHER , WILLIAM HOROBIN AND TOM MUDD, WSJ.com
Business confidence in the euro zone's top two economies continued to deteriorate in October, underscoring concerns that the currency bloc's economy could be close to stalling.
http://jlne.ws/qwGyK7
Finance Sector Says Some MiFID II Proposals Need Modifying
By Vladimir Guevarra Of DOW JONES NEWSWIRES
The European Commission's plan to increase the transparency of financial markets by overhauling regulations was broadly welcomed by industry associations Thursday, but they warned that some proposals needed to be modified to prevent them having an unintended negative impact.
http://jlne.ws/orVVTi
French Job Picture Dims
BY GABRIELE PARUSSINI, WSJ.com
The number of people actively seeking work in France rose in September to its highest level for 11 years, the labor ministry said Wednesday, adding to evidence that the euro zone's second-largest economy is being hard hit by the global slowdown.
http://jlne.ws/ss7FoV
Struggling French Banks Fought to Avoid Oversight
By DAVID ENRICH And DAVID GAUTHIER-VILLARS, WSJ
PARIS—Two years ago, a French banker flew to Washington on an emergency mission: Persuade International Monetary Fund chief Dominique Strauss-Kahn that his concerns about the health of the European banking sector were unfounded. The trip was a success. Mr. Strauss-Kahn agreed to keep his fears under wraps to avoid causing market panic, according to people familiar with the matter.
http://jlne.ws/nvDJk5
Chinese Banks’ Profits Surging 22% May Fail to Boost Valuations
By Stephanie Tong and Nathaniel Espino, Bloomberg Businessweek
China’s four biggest banks, forecast this week to report higher third-quarter earnings than the four largest U.S. lenders, may be stuck with valuations near record lows amid investor concern that bad loans will rise.
http://jlne.ws/sCJXgK
Danish Banking Crisis Entices Buyers Seeking Cheap Targets
BusinessWeek
Denmark's banking crisis has left in its wake a number of cheap acquisition targets that may entice buyers to take advantage of an industry brought to its knees by a sequence of insolvencies.
http://jlne.ws/tralfs
Saudi Exchange, Muni Board Aids IRS, 401(k) Rules: Compliance
Bloomberg
Saudi Arabia's Capital Market Authority is in discussions with international banks to open the country's stock exchange to foreign investors early next year, three bankers familiar with the matter said.
http://jlne.ws/tW2yWJ
World chefs: Vietnamese street meets high finance
Reuters via Yahoo! News
Making and selling Vietnamese street food may seem a world away from dealing in World Bank debt, but Anh Vu does both, and says that working a stall in East London markets sharpens the skills needed to thrive in investment banking.
http://jlne.ws/uXtOhP
Creditors’ decade-long battle with Argentina shows just how tangled sovereign defaults can be
The Economist
AS GREECE flirts with disaster and several other European countries buckle under heavy debts, creditors’ experience with Argentina should serve as a sobering reminder about the mess that can follow a sovereign default.
http://jlne.ws/rE30Mo
Portugal and the euro: In the mire
The Economist
BEFORE unveiling Portugal’s harshest budget in living memory this week, Vítor Gaspar, the finance minister, praised the hard work of the civil servants who had prepared it. The country’s 700,000 public employees may think he has a funny way of showing his gratitude.
http://jlne.ws/rbkPrX
The LIBOR Investigation spreads to EURIBOR
Forbes
For some time now there?s been an investigation into whether LIBOR rates were mis-reported at the time of the financial crash. It looks like this investigation has now spread to EURIBOR: RBS is among the banks to have had its offices raided by European Commission officials as part of the investigation into the suppression of ...
http://jlne.ws/or8Oa1
Banks face penalties in return for bail-outs
By Gerrit Wiesmann in Berlin, Hugh Carnegy in Paris and Alex Barker in Brussels - Financial Times
Distressed European Union banks that tap national governments or the region’s E440bn rescue fund for capital will be subject to state-aid penalties, involving compulsory restructuring or – in the worst case – orderly wind-downs.
http://jlne.ws/rddLdH
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