ECB

greek banking sector

How many NPLs in the Greek banking sector are also non-recoverable loans?

ATHENS | By Jens Bastian via MacroPolis | The recent presentation of half-year results by the four systemic banks in Greece – National Bank of Greece (NBG), Piraeus Bank, Alpha Bank and Eurobank – brought a mixture of good news and underlying structural challenges affecting the operational capacity of domestic lenders.


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Will we see a second round of QE in Europe soon?

MADRID | The Corner | “The ECB’s quantitative easing in Europe came late compared to the US Fed’s but before we expected,” Barclays’ Alberto Vigil commented on Monday, who believes that a second round of QE stimulus in the eurozone is about to take place soon. “Little bears may become a little like bulls,” he ironizes.  The combination of the QE with the strength of the American data has already brought a significant correction of the euro of 7%.

 

 


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Draghi does the dirty job while Germany attacks

FRANKFURT | By Lidia Conde | What a relief! France is reinventing itself as it is Angela Merkel’s hope. However much Mr Draghi warns that the ECB will do whatever it takes to save the euro, all the fresh money in the bank will be useless unless “some members of the Eurozone” change their economic policy. This is Germany’s analysis of the Eurozone state.


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The ECB failing to convince needs to act

MADRID | By JP Marin Arrese | Ever since Alan Greenspan moved at will financial markets behaviour, simply by talking up or down either expectations or exchange rates, central bankers have tried to follow suit. For all his merits, Mario Draghi lacks Greenspan’s skills. Even if he commands enough fluency in English, his messages sometimes are utterly ill placed. Yesterday’s underperformance in his press conference showed it vividly.


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ECB will give banks money to spend and punish those who sit on their hands

MADRID | The Corner | Mario Draghi finally unveiled the European Central Bank’s betting on further stimulating the eurozone: benchmark main refinancing rate will be cut from 0.15 per cent to 0.05 per cent and marginal deposit facility risen 0.1 per cent to 0.2 per cent. Also a programme to purchase a “broad portfolio of transparent asset-backed securities” will be in place from October this year. Thus, the ECB becomes the first central bank to announce large-scale asset purchases and negative deposit rates. Reactions were quick: the euro fell below the key threshold of $1.3 to hit a low of $1.2995. 


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QE gathers momentum

MADRID | By J.P. Marín Arrese | Mario Draghi’s anxious call to governments, urging them to put the house in order by implementing a combined economic and monetary policy, seems the right course of action. Deflationary risks run high as prices fall well behind the medium-term target. Once again, the Eurozone seems stuck as the growth prospects dwindle. Nothing new, as its appalling record during the crisis shows. Filling gaps through moral lessons, instead of money, hardly solves deeply entrenched problems.


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Europe’s PMIs mixed data confirms the need of new, strong action from ECB

MADRID | The Corner | August PMI figures confirm what investors already know: Europe’s economy continues to expand at a very low rate. Indeed, the final data have been revised downwards in those cases where no changes were expected, and they are worse than July’s. Final services PMI: 53.1 vs. 53.5 preliminary and 54.2 in July (highest level of the last 3 years). Specifically, PMI services index in Spain rose to 58.1 points in August from 56.2 in July, representing the biggest increase since December 2006. The consensus of analysts expected a slightly lower number of 55.5 points.


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ECB: We need a QE shot (not 17 of them, JPMorgan)

MADRID | The Corner | It’s speculation day before the European Central Bank’s tomorrow meeting. Will a QE plan finally be announced? Experts at Santander bank think that, if announced too early, it could damage TLTROs. JP Morgan economists believe there is a 30% chance we’ll get a QE shot in 2014, 50% next year. And they’ve come with a proposal we find erratic: 17 different bond buying plans, one for each state member. That is exactly the opposite direction the EU needs to be heading to.


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Eurozone’s credit continues to squeeze in July, especially in Spain

MADRID | The Corner | The ECB published yesterday figures on bank lending that show the  outlook keep being worrying. On the one hand there was an improvement in credit to households and on the other hand a further squeeze on credit to business, especially a pronounced decline in countries like Spain. The overall balance in July is a contraction of 1.6% YoY, which represents a further improvement since it got to the bottom during November, December and January (-2.5% YoY each month). Credit in the private sector continues to contract (-2.3% YoY) in line with last month but improving over July 2013 (-3.7% YoY ) and in general over the monthly evolution in 2014. In Spain the credit contracts € 7bn (-1.2% MoM from -1.04% MoM in June) and it moves back by € 77 bn YoY (-11.7%). In Italy the set-back is even bigger MoM (-3.6%) but is limited to +1.6% YoY.


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ECB stimulus speculations keep circulating

MADRID | The Corner | The expectation that the ECB will finally announce a QE program after Draghi’s words at Jackson Hole and the confirmation that the ECB would have hired Blackrock for advice on launching a ABS program continue to nurture the Eurozone bond rally and thereby the credit one. Yesterday many bond markets in Europe returned to record lows with improvements in 10 years of 3bp (Germany), 2.5bp (Spain) and 2bp (Italy).