From BusinessInsider: First: Olivier Bailly, a spokesman for the European Commission, said this morning that there are no plans to speed up re-capitalization for EU banks.
He said, "It has been going on since 2008, it is worthwhile recalling that. The amount for recapitalization of European banks is 420 billion (euros)." But there won't be a coordinated aid effort, he says, "there is no big European plan to recapitalize the banks." Many, including the IMF's Christine Lagarde, have said that banks need to recapitalize urgently because they have so much exposure to the Greece and the Eurozone debt crisis that if a negative capital event happens (which might in Greece), many banks would almost certainly be in default (like Deutsche CEO Josef Ackermann said).
Turns out yesterday's rumor about imminent recapitalization were false. Recapitalization is up to the individual member states and/or banks.
.
Second: The NYTimes reports that Euro banks have stopped lending, perhaps a result of investors' unwillingness to invest when they're uncertain that others will also inject capital
Debt issuance by banks has slowed to a trickle at the same time that short-term interbank lending is drying up. The financing drought raises questions about whether banks will have enough money to refinance their own long-term debt and still meet demand for loans.
The vicious cycle is gaining speed....
Read more: http://www.businessinsider.com/eu-banks-wont-get-capitalized-2011-9#ixzz1YnHqkqH3
No comments:
Post a Comment