The European Banking Authority (EBA) rectified the solvency figures for the Spanish banking sector. The regulatory authority has raised the average “fully-loaded” capital ratio at end-June to 10% from a previous 9%. This compares with the European sector average of 11.8%
James Alexander via Historinhas | In no other country in the euro zone is the public so intensely engaged with each monetary policy measures of the ECB as passionately as in Germany. This applies to the Bavarian public, which is particularly known for distinct opinions and clear announcements.
Harry W.S. Lee via Caixin| There is a widening gap between Chinese investments in the U.S. financial sector and those heading the other direction, mainly caused by the Chinese government’s restrictions on market access against foreign investors, an expert from the U.S. research firm Rhodium Group says.
The markets are seemingly focusing on next week ECB’s meeting rather than on geopolitical events. Investors expect they will take new measures on expansionary monetary policy. Yesterday, ECB’s vice president Vitor Constancio, insisted again that the central bank will analyse those if needed to reach the inflation target of 2%.
Spanish renewable energy and engineering group Abengoa is close to bankruptcy. The company, which has a debt level of € 6.283 billion, proposed a capital increase of 650 million euros and a financial adjustment. It also tried to negotiate with five banks and Spain’s government for a credit line. Finally, the company agreed to Basque steel maker Gestamp becoming a new shareholder. But this operation has now also failed.
Z. Yuzhe, W. Liwei and W. Hongyuran via Caixin | Strengthening the People’s Bank of China’s regulatory clout is high on a list of suggestions for improving financial market oversight following last summer’s stock market crash.
UBS | With 66% of cast votes officially counted, Mauricio Macri has defeated the officialist party’s candidate Daniel Scioli with 53.46% of votes vs 46.54% in the second round of Argentina’s presidential election. At the time of writing, Scioli had already conceded defeat.
James Alexander via Historinhas | You have to feel for ECB President Draghi sometimes. He’s trying to steer a huge and dysfunctional ship. His heart is in the right place, but he has far too much faith in the interest rate and credit channel “instruments” for the management of monetary policy. They have prevented further recessions and do seem to have the Euro area on the right track, but it is painfully slow and risky .
BARCLAYS | Brazil is confronting a toxic combination of a primary budg et deficit, high public debt (relative to EM countries), very high real interest rates (the Selic stands at 14.25%), sluggish trend growth, a negative commodity price shock and potential contingent liabilities for the sovereign, which together spell trouble for public debt dynamics.