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posted 25-02-2010 16:50
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What do you mean by European debt?
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posted 25-02-2010 16:51
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There's no (easy) way to know if they've been rejecting individual bonds or banks, but in general they haven't. The ECB temporarily reduced its rating requirement for (non-ABS) bonds to BBB- a while back, but that's due to expire at some point later this year. I'd be amazed if the ECB didn't extend the period, though - there's no point in it forcing a crisis.
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posted 25-02-2010 17:02
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That's what I would have thought too.
I can't see any upside for the ECB throwing napalm on the brushfire.
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posted 25-02-2010 17:04
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I was thinking the ECB could put some ruling that all EU member Government debt could be allowed in.
I know they are planning on doing allsorts with the window, but are slowly learning what the impact of that will likely be (beyond hurting Greece short term)
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posted 25-02-2010 17:23
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I was thinking the ECB could put some ruling that all EU member Government debt could be allowed in.
Yeah, that would make sense. But it would still render ineligible a lot of collateral that Greek banks would have been using.
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Last Edit: 25-02-2010 17:25 By Ginger Yellow.
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posted 25-02-2010 20:38
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Interesting. Alpha Bank has just issued and retained a credit card securitisation, presumably for repo with the ECB. Thanks to changes in its criteria announced this week, the deal has a rating of AA from S&P. Bear in mind that the ECB changed its rules to require an initial triple-A rating in December, but those rules don't come into effect until March. I'm sure the ECB is going to be ecstatic about this.
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posted 26-02-2010 18:10
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Hardly surprising. You'd be pretty nuts as a bank to buy a relatively low yielding bond (compared to, say, a similarly rated company) which is highly likely to become ECB ineligible. If the Greeks are going to sell a new issue, it's going to be to other central banks and funds, not commercial banks. Although, apparently the latest idea is for KfW to buy up a bunch of Greek debt.
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posted 26-02-2010 18:15
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That does seem to be the latest idea, which is par for the course when it comes to the German government's use of KfW.
That said, I thought we had reached a consensus yesterday that it was unlikely that the sovereign paper would become ineligible. The yield will of course still be lower than a comparably rated corporate bond, but they may have concentration limits that effectively require them to keep a certain portion of the portfolio in goverment paper.
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posted 26-02-2010 18:49
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That said, I thought we had reached a consensus yesterday that it was unlikely that the sovereign paper would become ineligible
Sure, I'd be surprised if the ECB didn't fudge it somehow, but a bank treasury can hardly base its decisions on that sort of hunch. That's what funds are for.
The yield will of course still be lower than a comparably rated corporate bond, but they may have concentration limits that effectively require them to keep a certain portion of the portfolio in goverment paper.
True, but it's way more expensive to hold paper like Greece than, say Bunds. A triple-A sovereign has a 0% risk weighting. A triple-B sovereign has a 50% risk weighting.
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posted 01-03-2010 13:55
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I see the pound's under attack and has slipped below $1.50. That makes London almost affordable.
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Last Edit: 01-03-2010 13:55 By Garamczy Antal.
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posted 02-03-2010 18:13
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Good, though depressing, article. Although it did explain what "cable" meant, which was excellent because I had no idea what it was.
Part of this "fall of the pound" stuff is a little overdone, though. I mean, sure the UK's fundamentals are awful, but whose aren't? What currencies are going to rise against sterling - the euro and the dollar both have their own problems.
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posted 18-03-2010 18:28
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The search engine seems to be completely buggered, so I'm posting this here rather than the main Irish banks thread. Anglo-Irish chairman arrested.
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posted 18-03-2010 18:54
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Wowza (you might want to add a "former" there).
The search engine has given up completely, hasn't it? It's really too bad, because it was working quite well immediately after the changeover.
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posted 18-03-2010 18:59
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Yes, very much former.
Most interested to hear the call after 24 hours of holding him.
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Last Edit: 18-03-2010 19:01 By dglhand of god.
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posted 19-03-2010 21:30
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That's a classic "hey, look here's some resistance!" article. No sense of how the debt should be paid off, or indeed that workers in countries that will bail Greece out have "living standards" too.
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posted 19-03-2010 21:34
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Sounds to me like the politics of envy, Tubbs.
Those Greek workers would - do - encourage workers in other countries to resist the attacks on their living standards too.
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posted 19-03-2010 21:43
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The politics of envy is a good thing.
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