Hits shareholders and junior bondholders before taxpayers foot part of the bill.
Details from the FT:
This updated EU rule book is based on the experience in Spain – where junior bondholders were hit and EU restructuring plans were agreed before the disbursement of bailout funds – and the Netherlands, which hit subordinated creditors in the nationalisation of SNS Real.
However, it stops short of the Cyprus bank restructuring, which imposed losses on senior bondholders and uninsured depositors. The EU is presently negotiating a directive that could bail-in senior bank creditors but these rules are unlikely to be enforced systematically before 2018.
Those declarative statements have a way of biting prime ministers on the bum…
- There is no pressure from Germany on additional bank rescues
- If Spanish banks need capital, it won’t come from the EU
Personally, I’d be shocked if the Fed began to taper bond purchases before the fourth quarter of this year, but Bernanke did keave the door open to acting in the next few meeting, with some caveats. The economic data will have had to have improved and the FOMC must be confident that the improvement is sustainable. That last clause on sustainability gives them plenty of time to wait and see…
The minutes of the last FOMC meeting won’t nearly as exciting as usual given that Bernanke has stolen the spotlight.
Oh, thank goodness. I thought it was going to be focused on fisheries…
Merkel, in Brussels for a summit with other EU leaders calls for better tax compliance and fraud detection and says companies should pay tax where they earn the money.
That’s a support level formed Tuesday morning.
A the moment, we are finding support at 1.2873, the 61.8% retracement of the 1.2796/1.2998 rally.
He didn’t rule it out and said it would be discussed in the next few meetings. A complete turnabout from his prepared remarks, which were very dovish.
103.50 barriers are coming into play. Highs so far: 103.45.
USD/CHF is soaring as well, shooting through 0.9800, to 0.9803.
Bernanke continues to caution Congress on overdoing fiscal restraint.
If anything, Bernanke says inflation is a bit too low.