capital

In order for banks to hedge against multiple defaults in the eurozone periphery, banks must increase the ratio of equity to total assets at least five percent, a German researcher has argued. Dorothea Schäfer worked out for the Frankfurther…

Central banks are taking on quasi-fiscal roles because the fiscal agent is lacking as in Europe or is unwilling to take bold steps toward a permanent solution to a systemic problem. What we need is ring fencing of core deposit-taking…

Today, it is euro banks that are the problem. For example, Goldman Analyst Alan Brazil suggests that euro banks need $1 trillion in additional capital. This has created distress in funding markets, particularly because of US money market…

Wow! Just came across this piece from the FT about the concerns of the International Accounting Standards Board (IASB) of how European financial institutions have not reserved enough against potential credit losses on their Greece sovereign…

Remember, this is a solvency crisis too, not just a liquidity crisis.

8 banks out 90 banks fail: Five in Spain, two from Greece and one from Austria (Spain's CAM, CatalunyaCaixa, Banco Pastor, Unnim & Grupo Caja; Austria's Volksbanken; Greece's Eurobank & ATEBank). One additional bank, Helaba, the…

The road map for how a Danish government might be forced to issue government bonds and swap them for unsalable covered bonds in order to allow its financial institutions to abide by the Basel rules is an almost sinister way in which the…

Point for point, I agree with the commentary from Felix Zulauf in this week’s Barron’s mid-year roundtable discussion. For long-time Credit Writedowns readers, you will recognize almost every one of these points from previous posts. It is…

Karl Whelan finds that a recent analysis by Hans-Werner Sinn on an alleged ECB bailout is incorrect. Willem Buiter is now out with a commentary on the same issue corroborating Whelan’s view. Below are the bullet points he highlights in his…

Marc Andreessen believes companies like Google and Apple are undervalued because "the market doesn't like tech.” In his view, the recent popularity of tech companies does not constitute a bubble. Instead, he sees a market that is starved…