capital

The banks are slowly admitting losses, but Bloomberg's summary is of a slow recognition. Even so, writedowns have left the banks stranded: unable to make loans. Up until now, it appears, the banks and the government were able to carry the…

Two weeks ago I told you that Spanish Prime Minister Mariano Rajoy’s humiliating defeat to Merkel had narrowed options to sovereign bailout, monetisation or default for Spain. Now that the Spanish bank bailout is unraveling and Catalonia is…

I recently wrote two member posts on the NPL problem in Europe. The source is a study by PwC's Frankfurt office that was released to the German-language media. Frankly, this report is everywhere in the German media and I think it's a big…

This week's second weekly-length post is just another review of the Price Waterhouse Coopers study that is big news in the German press. I have now seen the numbers in a bit more granular detail and I wanted to run through them for me…

As I wrote regarding the Spanish bank bailout just now, large losses at European financial institutions likely mean that equity will be wiped out. Government will then need to decide how the losses will be paid for. In Spain's case, the…

In Spain, it is well-known that many of the financial institutions need more capital. However, the question is how much capital. Spain has run dubious quality stress tests that say the banks need less than 40 billion euros. Others believe…

German Chancellor Angela Merkel is a brilliant political tactician. After the latest EU Summit, it seemed she had capitulated after being rounded on by France's Hollande in an effort by Italy's Monti and Spain's Rajoy to prevent the market…

Here's a second batch of links. I think the Bloomberg piece on Spanish banks is a big highlight here. Essentially, Bloomberg tells us that Spain may be overestimating bank profits and therefore underestimating the capital shortfall of its…

This week's newsletter will focus on Europe again as this morning the European summit has produced significant changes in European economic policy. Spanish Prime Minister Rajoy and Italian Prime Minister Monti threatened to 'block…

I guess we will never know whether or not Mariano Rajoy uttered the two magic words so effectively immortalized in song by Aretha Franklin that Saturday afternoon in late May as he cruised down the Chicago River in what Spanish media called…