‘ Minimising Cost of Future Liquidity and Preventing Financial Crisis ‘

#AceFinanceNews – BRUSSELS – September 22 – Implementing the EU response to minimising the public cost of future financial crises and getting banks to offer up loans top the agenda this WEEK it was reproted by EUobserver.  

European Central Bank (ECB) chief Mario Draghi on Monday (22 September) is set to debate the so-called targeted longer-term refinancing operations (TLTROs) with MEPs in the committee on economic affairs.

The idea is to improve bank lending to the eurozone by offering banks extra liquidity at a fixed rate for up to four years.

But the scheme attracted just €82.6bn (out of the €400bn on offer) of interest from banks this month.

Draghi had earlier this month surprised analysts by slashing interest rates to a historic low in an effort to stimulate lending.

The ECB cut is part of a larger attempt by EU policy makers to kick start member states’ overall sluggish economies and put millions of unemployed back to work.

But with the prospect of possibly having to fend off another financial crisis, lawmakers also tasked the ECB to oversee the financial health of around 130 banks with the power to shut them down.

Also known as the single supervisory mechanism, the newly endowed ECB oversight of banks is part of the single resolution mechanism (SRM), which aims to minimize bank bailout costs to taxpayers.

SOURCE:

#AFN2014

#banks, #brussels, #ecb, #european-central-bank, #eurozone, #financial-crisis, #liquidity, #mario-draghi

‘ Banking Union Faces Germany’s Constitutional Court To Access Legality of Changes ‘

#AceFinanceNews – BRUSSELS – July 29 – Germany’s constitutional court is once again to be a testing ground for the eurozone’s reponse to the financial crisis as a group of academics has filed a case arguing that the banking union is illegal reported EUobserver on the July 28 in Brussels.

The five academics argue that the Banking union – a new supervisory and bank resolution system for eurozone banks – breaches German law as it was not agreed with the right treaty changes, reports Die Welt am Sonntag.

Markus Kerber, a finance professor at Berlin Technical University (TUB), told the paper that the banking union had "no legal basis in the EU treaties and so represents a breach of constitutional rights."

The supervisory system – under which the European Central Bank will, from November, oversee the financial health of around 120 banks with the power to shut them down – is the "pinnacle of Brussels power-grabbing to date", says Kerber.

The complainants, who filed their papers last week, also find that a conflict of interest has arisen because the ECB council, which also makes interest rate decisions, has a veto right on banking supervision decisions.

The challenge also calls into question the Single Resolution Mechanism, which sets out to deal with failing banks, as well as the €55bn fund meant to cover the costs of the process.

#AFN2014

#ans2014, #banking-union, #european-central-bank, #european-union, #germany

` German Finance Ministry ` European Central Bank ‘ to raise ` Interest Rates ‘ citing an internal Document ‘

#AceFinanceNews – ECB – March 30 – Experts at the German finance ministry expect the European Central Bank to raise key interest rates soon due to the economy picking up, a German news weekly said on Sunday, citing an internal document –

With the Eurozone debt crisis increasingly fading and an improving economy, “an active contribution to the overcoming of the low interest policy is to be expected” from the ECB, Spiegel quoted the ministry document as saying.

That will lead to Germany having to pay more for its loans in a year’s time than it currently does, according to the experts at Finance Minister Wolfgang Schaeuble’s ministry.

The ECB has held its key interest rates at an all-time low of 0.25 percent since November and analysts do not expect a cut by the Frankfurt-based bank at its meeting this week.

#AFN2014

#aceworldnews, #ans2014, #ecb, #european-central-bank, #eurozone, #frankfurt, #german, #wolfgang-schauble

` Greece's Debt Problems have Caused the `Troika ' Problems Firstly with Handling and now Solving the Crisis '

#AceFinanceNews – ​EUROPEAN UNION – European lawmakers are calling into question the ability of the Troika to effectively deal with the crisis, and many are attacking its methods.

An investigation report due in April will look at the handling of the Greek sovereign debt debacle.

The probe by the European Parliament on how the International Monetary Fund (IMF), the European Central Bank (ECB), and the European Commission (EC) monitored and helped to solve the euro debt crisis, which started in 2008, triggered by the US financial collapse.

“The Troika acts like a governor and visits it’s colonies in the south of Europe and tells them what to do. The measures that they come up with though are not always very effective,” Derk Jan Eppink, an MEP from Belgium who initiated the probe into the Troika, told RT.

The IMF has admitted it made mistakes in the handling of Greece’s first international bailout, but some EU lawmakers want more answers.

Findings are expected to be published in April 2014, a month before the next EU Parliamentary elections.

RT – Finance News and Media Sources

#AFN2014

#europe, #european-central-bank, #european-commission, #european-union, #greece, #greek, #imf, #international-monetary-fund, #troika, #us

” Mission of `International Lenders ‘will return to `Greece’ this week to`Review’ Reforms”

#AceFinanceNews say that `Eurogroup’ says troika to return to Greece this week, as there has been no progress in discussions with `Greek‘ authorities.

European Central Bank

A mission of international lenders will return to Greece later this week to review progress made in delivering on the country’s reforms, the chairman of euro-zone finance ministers, Jeroen Dijsselbloem, has said.

The International Monetary Fund (IMF), the European Commission and the European Central Bank interrupted a visit to Athens last year because there was no progress in discussions with Greek authorities.

This has held up disbursements of loans due since September 2013, Reuters said.

The main sticking point is how Athens would plug a gap in this year’s budget, estimated at 1 billion euro.

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#acefinancenews, #athens, #eurogroup, #european-central-bank, #european-commission, #greece, #international-monetary-fund, #jeroen-dijsselbloem, #reuters

The Beginning and the End of the Next Global Currency

As China’s exporters were hit by the global re...

As China’s exporters were hit by the global recession in 2008, the People’s Bank of China began stepping up her intervention programme to prevent appreciation of the Yuan. By April 2011 Chinese state controlled banks had accumulated over one trillion in US treasuries and over 1.5 trillion in other dollar assets. China has indicated she plans to further rebalance her economy towards domestic consumption, and intends to stop buying dollar assets by 2016. (Photo credit: Wikipedia)

A while ago in predicted the currency changes in the market to a number of my colleagues who then could not see the “Sign of the Times” but l was looking at a number of indicators. These were that the Chinese believe in keeping to customs and are steeped very much in the past ,so much so that they would keep their “Sovereign Currency” the Yuan in tact. Their decision on may occasions has been to not devalue, as so many other countries have advised. They have stuck to their guns and the time is coming when this “Third World Currency” will become one that everyone will want to trade!

So to today’ s article in the AFP it deals with changes and how the deals with both London and Singapore will challenge the once Almighty Dollar and how with new free-trade zones opening up ,it could well one day become the “People’s Currency” then where will this leave these oil rich nations. The demise of the “Petro-Dollar ” could we finally see the end of OPEC and their stranglehold on the per barrel price.

 AFP – With deals from London to Singapore, China is seeking a greater role for its yuan currency in global markets to challenge the hegemony of the almighty dollar.

The most attention-grabbing reform planned for Shanghai’s new free trade zone is free convertibility of the yuan — also known as the renminbi, or “people’s money” — an unprecedented change which would allow greater use of the currency.

But no timetable has been specified, and a true contest between Mao ZedongCommunist China‘s founding father whose face is emblazoned on most yuan notes, and Benjamin Franklin on the $100 bill will be years in the making.

Chinese currency : Renminbi.

Chinese currency : Renminbi. (Photo credit: Wikipedia)

For decades the US has benefited to the tune of trillions of dollars-worth of free credit from the greenback’s role as the default global reserve unit.

But as the global economy trembled before the prospect of a US default last month, only averted when Washington reached a deal to raise its debt ceiling, China’s official Xinhua news agency called for a “de-Americanised” world.

It also urged the creation of a “new international reserve currency… to replace the dominant US dollar”.

For China — which has the world’s biggest foreign exchange reserves — the immediate appeal of a greater role for the yuan is lubricating trade flows and drawing foreign investment.

“Policymakers have made new efforts to increase the attraction of the renminbi in global markets,” said Capital Economics analyst Wang Qinwei.

He pointed to a deal with Britain in October allowing London-based institutions to invest directly in China — avoiding an expensive detour via Hong Kong — with an initial quota of 80 billion yuan ($12.9 billion).

A week later Beijing signed a similar 50 billion yuan agreement with Singapore.

China’s central bank, the People’s Bank of China, also signed a currency swap deal with the European Central Bank last month for 45 billion euros ($61 billion), giving euro zone banks greater access to the yuan.

In the run-up to an important plenum of the ruling Communist Party, Zhao Longkai of the Guanghua School of Management at Peking University, said the measures were “important steps” but added that progress was likely to be slow.

#acefinancenews, #almighty-dollar, #china, #european-central-bank, #guanghua-school-of-management, #london, #peoples-bank-of-china, #renminbi, #singapore, #united-states

Germany’s top economic policymakers have clashed in court…

Germany’s top economic policymakers have clashed in court, setting out very divergent views on the legality of measures to tackle the eurozone crisis.
At Germany’s Constitutional Court, the Bundesbank’s chief opposed the European Central Bank’s buying of bonds to ease the pressure on eurozone countries.
But Germany’s finance minister and a German ECB board member strongly defended the policy.
Thanks to BBC News at http://www.bbc.co.uk/news/world-europe-22852929#sa-ns_mchannel=rss&ns_source=PublicRSS20-sa

#debt-crisis, #bundesbankl, #european-central-bank, #eurozone

Mario Draghi-Call Me Bond Junk Bond

Printer Mario Draghi

Printer Mario Draghi (Photo credit: Ondrej Kloucek)

The Before Thursday:

After Ben Bernanke took the stage in Jackson Hole last week to rather defensively suggest the Fed will act soon, Thursday is Mario Draghi’s turn.

Before we get into the details of what the ECB could announce, a quick update on the European debt crisis: It’s still there. Yields for Spanish and Portuguese debt are at or above the 7% danger zone, and Italy is publicly complaining that their debt costs have little basis,Jens Weidmann, Germany’s top central banker, meanwhile, is reportedly both isolated and threatening to quit over his opposition to the ECB buying debt of struggling EU countries.

In a closed-door meeting in Brussels yesterday, Mario Draghi told the European Parliament that he’d be comfortable buying EU members’ bonds with maturities of three years or so. This, Draghi reportedly said, wouldn’t violate EU treaties. (Bill Gross tweeted that this bond-buying program would be something like writing “2-3 year checks”).

Of course, ECB bond-buying has been the summer’s worst-kept secret. As the WSJ’s Matt Phillips noted, Draghi said this on July 25: “To the extent that the size of these sovereign premia (in Spain and Italy) hamper the functioning of the monetary policy transmission channel, they come within our mandate”.

Draghi’s hints mean that three years into the European debt crisis, the ECB may finally return to limited, direct financing of struggling governments. Analysts, however, are all over the map about what the ECB may actually announce after its meeting on Thursday, and whether it will involve yield caps.

One safe bet: more political entanglement. Even though Draghi insists the ECB is not political, his actions are still very much wrapped into discussions on what he recently called “the sharing of powers and of accountability”. Or, as Nomura put it: “Just imagine if the Fed had to play tough with California or worse Texas for example, to effectively impart monetary policy”.

The Economist‘s Charlemagne blog has a great description of Draghi’s predicament: He simply can’t fix Europe without the help of the continent’s leaders:

The After Thursday:

So finally after all the wheeling and dealing Mario Draghi got his own way and opened Pandora’s box and now we wait! This is the fact that the ECB the “lender of last resort” has finally supported ” buying up debt” and letting it be sold as ” junk to the highest bidder.” We can all con ourselves this is for the good of the euro zone but really we know it is for the good markets and nobody else!The real winners short-term are the gamblers of our food,oil and lives!

The control of the masses by the few is how we should see it and the sheer fact that our lives are controlled by a simple but very effective piece of paper called simply a “share.” Well now we own a share of ” gambling debt” a little like an IOU that will never be repaid! So instead of having ” junk bonds” we now have junk funds, capitalise by gambling debt!

And as we all know when you are in debt one day you have to repay pay it or eventually declare bankruptcy!

#ben-bernanke, #draghi, #ecb, #european-central-bank, #italy, #jackson-hole, #jens-weidmann, #mario-draghi

Euro Zone Market News

German Logo of the ECB.

German Logo of the ECB. (Photo credit: Wikipedia)

Fiscal policy

Fiscal policy (Photo credit: Wikipedia)

Market News and Views

The FTSE 100 is called to open higher this morning after the performances on Wall Street and in Asia overnight after supportive comments from German Chancellor Angela Merkel on the European Central Bank‘s plans to help the euro zone debt situation. She also called for swift integration of fiscal policy in Europe adding that time was running short. There is no important UK economic data due out today so attention will focus on the release of the preliminary reading of the University of Michigan Consumer Sentiment Index this afternoon in the US. Commodity prices are mixed in trading and on the foreign exchanges, the major currencies are range bound with the dollar edging slightly higher.

So on the face of it we are going to get this mess finally sorted! Even though this belies one truth that is hidden, any fiscal policy will only work with growth! The sheer fact that for the last 4 years in real terms growth has eluded the world, apart from parts of Asia and especially China! Even though they are starting to feel the draft of their economy starting to chill!

My personal view is that very soon the European Central Bank will have to act to shore things up but this only puts of the fateful day, when a reckoning will be needed! This is closer than we think but further from our minds than we care to admit!

#angela-merkel, #asia, #chancellor-of-germany, #european-central-bank, #fiscal-policy, #ftse-100-index, #university-of-michigan-consumer-sentiment-index, #wall-street

Change Is Happening But It Is Not Yet Time

Euro

Euro (Photo credit: Images_of_Money)

Nice Interesting article and l see many reasons for believing Gold will not yet peak! There is however one irrefutable reason it will drop in the future and that is an end of the Euro Zone! In the meantime, people are making good returns!

#euro, #european-central-bank, #european-sovereign-debt-crisis, #european-union, #eurozone, #germany, #greece, #united-states