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Interviews 14th March 2012

More Anglo-Saxon bankers should go to jail, says OECD’s William White

MADRID | Former colleagues at the Bank of England will read with some sense of shock what William White told the Spanish financial newspaper Expansión during an interview with one of its editors, Miquel Roig. Or perhaps not. After all, as Roig points out in today’s edition, “‘Central bankers are a strong brotherhood of mutual admiration,’ former ECB president Jean Claude Trichet used to say. William White was the one who dared…

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Interviews 13th March 2012

The cheek of Mario Draghi with private investors!

By Luis Arroyo, in Madrid | The Greek restructuring has been a most impressive achievement. But it has fallen only on private investors’ heads. Public bondholders, like the European Central Bank (ECB), refused to take in their share of losses as everyone else did. When the EBC’s governor Mario Draghi was asked about the ECB’s special protection, turning the central bank into a super-privileged investor, he replied: “I can answer…

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In Europe 13th March 2012

Schroders: neither austerity, nor monetary expansion but a Marshall Plan

LONDON | Investment house Schroders brings in its latest ‘Economic and Strategy Viewpoint‘ the final word about austerity versus money printing. It is a conciliatory one. Well, sort of: chief economist Keith Wade and Europe economist Azad Zangana set the record seamless and believe each team is right, at least, about the other team: they all are wrong. On one hand, Wade and Zangana say they hold the “belief that…

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In Europe 9th March 2012

In Greek deal, commissioner Rehn praises investors but some feel scolded

LONDON | UPDATE | Unanimously. The International Swaps & Derivatives Association resolved Friday evening the last unknown about Greece’s restructuring debt process. The Greek government used collective action clauses to drag a small group of investors into accepting losses under the nation’s laws. The association ruled that this could be considered as a credit event that triggers payouts on credit default swaps or CDS, a market whose participants were anxious while waiting…

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Markets 9th March 2012

The Greek swap-opera

LONDON | Half an hour before the deadline passed at 20:00 GMT on Friday, the Greek minister for international economic relations Constantine Papadopoulos confidently told Sky News in London that default had been averted. “The indications we have are that the debt swap seems to be going well. Greece will get the necessary bailout as we have now cleared the major hurdle and can look forward to a new beginning,” Papadopoulos explained, although…

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Markets 8th March 2012

Lose any hope of escaping a stern haircut on Greek debt holdings

By Juan Pedro Marín Arrese, in Madrid | Those hedge funds resisting debt restructuring shouldn’t nurture any hope to save their money. The titles they hold might be governed by international law. But should Greece turn off the tap, counting on CDS to fill the gap might prove a delusion. Credit default guarantors have already warned they will simply fail to respect commitments entered. The ensuing claims might fatten law…

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Markets 23rd February 2012

LHC.Clearnet cuts down by 10pc the additional margin for Irish bonds

LONDON, MADRID | Ireland and Greece appear this week at the opposite ends of the rainbow. Santander credit research team painted Thursday an optimistic picture in its investors’ note based on the news that LHC.Clearnet has cut down by 10pc the additional margin it requires, which was 25pc, for positions in Irish government bonds cleared through its RepoClear service. A more relaxed market environment has also prompted Ireland to increase asset sales to €3…

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Markets 21st February 2012

Iceland, an example to follow or not? It depends…

By Julia Pastor, in Madrid.- Since last week, Iceland debt is no longer rated as junk bond. Fitch raised the country’s rating by one notch, from BB+ to BBB-. This fact has sparked a significant number of comments about whether the way in which Iceland has managed the economic crisis is a model for other  European countries, particularly the peripherals. It is undeniable that the actions taken by the so far Iceland…

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Markets 21st February 2012

Baring increases exposure to peripheral euro debt

LONDON | Andrew Cole, director at Baring Asset Management announced this week that the investment firm has expanded its purchase programme of Italian debt. Baring believes that European Central Bank interventions in the markets, improving liquidity available to European financial entities, have proven to act as a barrier against higher risk trends. Mr Cole said that euro zone economic forecasts look gloomy this year and will possibly remain weak in 2012,…

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World economy 18th February 2012

Weekend read | Greece shows Euroland inability to run a monetary union

By Juan Pedro Marín Arrese, in Madrid | Greek politicians’ sheer incompetence and the stiff resistance of its population to renounce living beyond its means are branded as evidence of that country unavoidable failure. Yet it only shows European leaders’ blindness in grasping how a monetary union should work. Their diagnosis on where the problem laid has proved to be utterly wrong. Obsession about budgetary targets, they knew beforehand to…