capital

This daily commentary is a bronze-level post for Pro subscribers. Two articles worth reading on the 2004 change in net capital rules for investment banks are highlighted in today's links.

Chris Whalen is a highly regarded banking analyst who has been quite critical of the goings on with banks and their regulators. However, he is very even-handed in his assessment of the Fed's latest stress tests of the largest 19 banks.

That Weidmann now wishes to publicly claim he is concerned about risk associated with the Bundesbank's Target2 credit does not simply mean that this is a truth that has now been "acknowledged". I would guess that the sober Bundesbank…

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…

Fortunately the ECB has deep pockets, and as I argue in this post, these will probably suffice to keep short term bond yields down to acceptable levels, and help the banks fund themselves and recapitalise. What the ECB’s LTRO’s won’t do is…

There is less mobility in the work force because the computers are not simply displacing jobs, they are taking out the middle. Because they take out the middle, it is a lot harder to pursue the American dream by working your way up the…

At the end of last year, Italian 10-year yields were more than 200 bp on top of Spain. The spread has narrowed in recent days, but is still well beyond the euro era average of about 10 bp and the late 2008 extreme near 65 bp. There is more…

A chart with a country by country breakdown of the over 100 billion euros of additional capital needed by euro zone banks

More News Links for 13 December 2011 including a report of Verizon chasing Netflix, Google building a siri competitor and a potential mobile driving ban.

News links for 10 December 2011 on US politics, fracking, venture capital and technology