Austria

Fitch has not been as aggressive as the other two agencies, keeping Austria and France at AAA up until now. As such, its negative comments about the Netherlands are noteworthy and likely signal a harder line by Fitch in the coming months.…

Since the Great Financial Crisis began, Austrian house prices have zoomed at a pace well above the rate of inflation and the rate of rentals. The price action and other anecdotes make this sound suspiciously like a bubble. The same has…

According to Austrian newspaper Der Standard, Austrian banks had 18.1 billion euros of exposure to foreign sovereign debt at the end of October. The debt to which the banks were most exposed were Polish, Italian, German and Hungarian…

One of the key factors behind the poor sentiment toward the euro, which was pressed to new 13 month lows in Europe today, is the challenge posed by the sovereign and bank refunding needed this year, while rating downgrades loom around the…

News links for 4 December 2011.

What is becoming clearer to almost everyone is that this is now no longer simply a Euro periphery sovereign debt crisis. It has become a full blown crisis of confidence in the Euro itself.

Look at these charts that Win Thin has crafted on sovereign bond spreads. this is what I want to discuss.

Here are a few charts from the credit default swaps market based on 5-year CDS. Here’s what I see.

Whether the writedowns make investors feel relieved because of the alleged balance sheet transparency remains to be seen. However, the balance sheet woes at Erste highlights how active banks within the EU are in cross-border relationships.

Central European borrowers loaded up on cheap Swiss franc and euro loans (mainly from Austria and Switzerland) in the lead up to the credit crisis because of higher nominal rates in central Europe. When the crisis hit, these loans became…