Etiquetas: banca* + crisis* + italia*

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  1. A country like Spain or Italy could conceivably enter a financing programme pre-emptively, taking it off the markets before turbulence from a Greek exit struck. But that would simply raise questions about how much ammunition Europe had left to cope with another country in distress. That leaves the banks. Another burst of liquidity for the banks, an LTRO 3, would provide Spanish and Italian banks with the funds to keep on buying up sovereign bonds. But the cost, for Spain in particular, would be a further deepening of the ties between banks and sovereigns. A better answer for Spain, especially at a time when lenders would be facing more losses on their remaining Greek exposures, would be for Europe to provide substantial funds to recapitalise weak lenders. It would be best if that could be done directly via the block’s rescue funds, so that money did not have to funnelled via governments, thereby raising the spectre of subordination for existing sovereign creditors. The problem is that direct recapitalisation is not currently allowed. If policymakers could rouse themselves to sort that out, they might also consider allowing the rescue funds to act as deposit-guarantee funds, helping to persuade depositors in vulnerable countries to keep their money at home.
    Tags: , , , , , por David de Ugarte (2012-05-11)
    Voting 0
  2. Les han pillado: Spanish banks bought about EUR68bn of government bonds December through February. Italian banks bought around EUR54bn of government bonds, but also accumulated EUR98bn in bank bonds. Given the current environment, this is unlikely to represent an actual investment in financials, but rather a reflection of retained, government-guaranteed issuance. This leaves Italian banks in a very different position compared to Spanish ones. Spanish banks either had to post existing assets (at generally higher haircuts than for government guaranteed issuance) or purchase high-quality collateral to draw down liquidity to hedge their funding risks. Assuming similar challenges on the funding front, Italian banks are currently long cash compared to Spanish banks. This leaves them in a much better position to support their sovereign going forward.
    Tags: , , , por David de Ugarte (2012-04-07)
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