capital

On Thursday the European Banking Authority released the results of the latest European stress tests showing a total capital need of €114.7 billion across 71 banks. While German banks might argue that they got the worst of the surprises,…

Like many, we at the Global Macro Monitor believe the only solution to the European debt crisis is to write down bad debts, but we’re also realistic that it will take time because of the weak and highly levered balance sheets of many of the…

Financial news links for 8 December 2011 including stories on Denmark and Danish bank capital, the European sovereign debt crisis and Spanish banks

Here is the second version of this foreign news links post that I am starting. The feedback yesterday was good. You all said it makes sense to see what the press in country are saying in Europe since that is the locus of the sovereign debt…

Andrew Haldane, in my opinion, generally has the right idea about banks and their risks, which are risks not just “to themselves” but to all of society and the global economy. Yet here Haldane’s endorsing the sort of sleight of hand that…

There are a number of ways that European banks are moving to boost their Tier 1 capital and strengthen their balance sheets. Some are cutting dividends, diluting current share holders through new rights issues, laying off staff, and selling…

Jim Grant spoke to Bloomberg News earlier today about the sovereign debt crisis. He says the fundamental question is "What will the European Central Bank do next?" His answer: they will "print money". He believes that all of the central…

If the Federal Reserve were to load up on Italian bonds, the Fed would be exposed to default on foreign currency assets. If Italy defaults, then the Fed is on the hook. Offic

Harvard Economist Kenneth Rogoff has a post up at Project Syndicate which does a good job in laying out the conundrum that Europe faces in the sovereign debt crisis. He theme is exchange rates and currency revulsion. But the underlying…

Liquidity crises are always solvency crises. The question is about determining which company, nation, or debtor is insolvent in a world of incomplete information. This leads to panic and a wider liquidity crisis that stresses the balance…