Posts Tagged ‘ ecb ’

ECB fights with Germany on EU plan for failing banks

Had to re blog ,
Always the case an independant authority body of the EU always has to have a fight with Germany .
You can’t give control to a independant body then criticise it when it doesn’t do what you want !

Be easier to call the ECB the Bundesbank !

Tony Evans

http://www.bloomberg.com/news/2013-05-14/ecb-picks-fight-with-germany-on-rules-for-handling-failing-banks.html

ECB fights with Germany on EU plan for failing banks.

In a public debate during a meeting in Brussels today, the European Central Bank clashed with Germany over how the European Union will handle struggling banks and whether to create a common place to fund and manage bank failures.

ECB Executive Board member Joerg Asmussen called for creating a central agency and an industry-funded common backstop for handling failing banks by ‘the summer of next year’, when the ECB takes up new supervisory duties.

Asmussen endorses the emerging consensus on depositor preference as part of so-called bail-in rules: “The pecking order would first write down shareholders, subsequently bail in junior creditors, then senior unsecured creditors and only if necessary and as a last resort uninsured depositors”.

However, German Finance Minister Wolfgang Schaeuble said that the EU should not try to create a single resolution agency without amending current treaties.

EU leaders have begun working on a banking union last year, with the aim of breaking the cycle of contagion between nations and their banks. They started by giving the ECB oversight powers and later created a single mechanism for handling bank failures.

Further to this, the Ministers also signalled today a growing willingness to give preference to depositors when assigning losses, putting senior bondholders and other unsecured creditors more squarely in the firing line.

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Re Blog Nigel Green – Bold move by Japan

Great post by our CEO talking about Japan ,
Abenomics there will be winners and loosers ,
Problem now is the “silver savers ” they have seen their income buying power increase over the last 20 years , if they start being a problem this could all be for nothing !

They control $7trillion ! In personal assets ,

Tony Evans

Nigel Green – Bold move by Japan

Having spent 20 years in the economic doldrums Japans new Prime Minister has attacked the stagnate economy with massive QE. The Bank of Japan is preparing to boost its balance sheet to 60 per cent of GDP by next year. In ther words its printing extra money to the equivalent of Turkey . Its a massive boast to the Japanese economy and think ultimately to the World economy. The US is picking up nicely, China is doing well, all it needs now is a European reaction. So far the only reaction from Europe is the European Central Bank primed the markets for a possible cut in interest rates to 0.5 per cent as soon as next month.

The massive QE in Japan caused the yen spiralled downwards as Haruhiko Kuroda, the new Governor of the Bank of Japan, used his first policy meeting to jettison the ultracautious approach championed by his predecessor and announce a doubling of his balance sheet in an explicit attempt to hit a 2 per cent inflation target.
The Bank of Japan’s radicalism surpassed analysts’ expectations: it is preparing to boost its balance sheet to 60 per cent of GDP by next year as it gobbles up government bonds and other assets.
Investors should consider more exposure as the World economies start recovery, and limit exposure to Govt Bonds. At some point interest rates will raise and when they do expect a massive fall in bond values.
Nigel Green deVere Group

Yen Rises to Near Four-Week High on Safety Demand

The yen strengthened to a level not seen in four weeks against the dollar after U.S. manufacturing expanded less than forecast.The Federal Reserve looks less likely in reducing the bond buying program .

This is a great time for people with YEN to convert to other currencies as I can’t see this lasting.
I can see the yen wekening again based 2 events :

Bank of Japan Meeting

The new Bank of Japan Governor Haruhiko Kuroda will be holding his first meeting on April 3-4,
He is committed to the 2% and has said he will take all actions needed.

ECB Meeing

ECB President Mario Draghi and the committee will have the monthly meeting on April 4th,
With unemployment in the EU rising to record high. Something’s needs to be done here , and I think again it will be down to Super Mario to do something .

Lets watch the space and see what happens , all we know is volatility is a guaranteed , all you got to do is be on the right side of the trade !

Tony Evans

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