February 23, 2012, 5:14 AM EST
By Fabio Benedetti-Valentini
(Updates with CEO comment from third paragraph.)
Feb. 23 (Bloomberg) — Credit Agricole SA, France’s third- largest bank, reported a greater-than-estimated loss in the fourth quarter after setting aside money at its Greek consumer- banking network and writing down investments.
The shares dropped after the net loss widened to 3.07 billion euros ($4.07 billion) from a deficit of 328 million euros a year earlier. That missed analysts’ estimates for a 2.7 billion-euro loss.
In 2012, “the main worry is the need for economic growth to get restarted,” Chief Executive Officer Jean-Paul Chifflet said in an interview with Bloomberg Television. The company, which holds the largest lending book in France, plans “to keep financing” the economy, he said.
Credit Agricole scrapped its 2011 dividend in December and said it can’t confirm 2014 targets because of “the lack of visibility on the economic and financial climate.” The bank, along with BNP Paribas SA and Societe Generale SA, is cutting investment-banking jobs to reduce costs after Europe’s debt crisis curbed trading revenue, U.S. money-market funds reduced short-term lending to French lenders and regulators imposed stricter capital rules.
Credit Agricole fell as much as 21 cents, or 4.2 percent, to 4.80 euros and was at 4.88 euros at 9:02 a.m. in Paris trading. That pares the gain this year to 12 percent. BNP Paribas, France’s biggest bank, has risen 18 percent this year, while Societe Generale, the No. 2 lender, has advanced 32 percent.
Greek Writedowns
European financial stocks rebounded in the first seven weeks of the year after the European Central Bank provided 489 billion euros to lenders through a three-year refinancing operation in December.
BNP Paribas and Societe Generale both said last week that they wrote down their Greek sovereign-debt holdings by 75 percent. BNP Paribas reported a 51 percent drop in fourth- quarter earnings on Feb. 15, while Societe Generale said the next day that profit in the period declined 89 percent.
Credit Agricole said in a statement that it booked about 2.6 billion euros in writedowns on investments including its stake in Spain’s Bankinter SA and Banco Espirito Santo SA of Portugal in the quarter. The company also had 220 million euros in fourth-quarter markdowns on its Greek sovereign-debt holdings, bringing its average writedown level to 74 percent.
Emporiki Losses
While Credit Agricole’s sovereign-debt provisions for Greece are smaller than those of BNP Paribas, it had a 5.5 billion-euro net refinancing exposure to the country at the end of December through its consumer-banking network Emporiki Bank of Greece SA. The Athens-based unit had a 352 million-euro fourth-quarter loss as provisions for risky loans increased. The French lender spent about 2.2 billion euros in 2006 to amass a controlling stake in the division.
Credit Agricole can’t commit to any target for Emporiki to stop the losses, Chifflet said.
“It would be quite audacious to say that it is in 2013, 2014,” he said. “We’ll try to do it as fast as possible, but without saying when because it depends a lot on the return to growth in Greece.”
Chifflet, 62, plans to reduce “by a maximum” Credit Agricole’s exposure to refinancing Emporiki and expects Portugal to escape the contagion after Greece received a second rescue this week.
Investment-Banking Deficit
Greece sealed a 130 billion-euro bailout package by agreeing on Feb. 21 to austerity measures while reducing its bond principal by 53.5 percent as investors swap into new securities with longer maturities and lower coupons.
Greek Finance Minister Evangelos Venizelos repeated yesterday that a formal invitation for the bond exchange will be made by Feb. 24. Real losses from the swap may be more than 70 percent, analysts have said.
Credit Agricole’s corporate- and investment-banking unit had a fourth-quarter loss of 1.2 billion euros compared with a 263 million-euro profit a year earlier, hurt by a one-time 1.05 billion-euro capital-markets goodwill writedown and higher losses from subprime-era assets the lender is winding down, according to Bloomberg calculations from bank data.
The corporate- and investment-banking division also booked 336 million euros in one-time costs as it closes businesses and cuts jobs.
Credit Agricole’s corporate and investment bank will close operations in 21 countries, remaining active in 32, while ending its equity-derivatives business, the firm said Dec. 14.
The bank is shedding about 1,750 positions at the corporate and investment bank, including 550 in France, it said in December. The company is also eliminating 600 consumer-finance jobs.
Asset Reductions
Credit Agricole is cutting fewer assets than its two larger French rivals as the lender is also less vulnerable to the dearth of U.S. short-term dollar funding that hit European banks last summer, analysts have said. The asset-reduction plans don’t include the lender’s so-called run-off portfolio, Chief Financial Officer Bernard Delpit said in November.
Credit Agricole is cutting its debt by 50 billion euros between mid-2011 and the end of 2012, “especially” by refocusing on its corporate and investment bank, the company repeated today.
“Corporate and investment banking will reduce its balance sheet, adjust its cost base and adapt its business model to generate income in a restrictive environment, notably by increasing the share of commissions and fee income in its revenue mix,” the lender said.
The investment bank started off “well” in 2012, Chifflet said in the interview. The bonus pool for traders and other “risk takers” was cut by about 20 percent to an average of 105,000 euros, he said.
Profit from the regional banks’ French retail network rose 2.8 percent to 216 million euros while asset-management profit fell 8.8 percent, hurt by outflows in France, the lender said.
–With assistance from Caroline Connan in London. Editors: Stephen Taylor, Dylan Griffiths
To contact the reporter on this story: Fabio Benedetti-Valentini in Paris at fabiobv@bloomberg.net
To contact the editors responsible for this story: Frank Connelly at fconnelly@bloomberg.net; Edward Evans at eevans3@bloomberg.net
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2012年2月22日星期三
Tangled in diplomacy, EU struggles to frame new financial rules
BRUSSELS (Reuters) – When it takes six hours to draft a single sentence in a 100-page document, you know things are moving slowly.
In meeting rooms of embassies across Brussels, diplomats are haggling over the finer details of dozens of reforms more than four years after the financial crisis that devastated European banks and triggered the euro zone’s struggle with debt.
While the United States agreed in 2010 an initial framework to prevent financiers taking the kind of risks that sparked the deepest global recession since the 1930s, the European Union‘s response is often tangled in backroom diplomacy.
“Bailout is a naughty word these days but we haven’t created a system to deal with failing banks without one,” said a diplomat from a northern European country who is working on around 15 different EU dossiers to regulate finance. “We are still spending hours arguing over the wording of a sentence.”
The crisis revealed how regulators and even top bank executives on both sides of the Atlantic failed to grasp the risks in the complex financial architecture they helped build.
But agreeing new laws among the bloc’s 27 member countries and the European Parliament is becoming so burdensome that diplomats worry Europe‘s defenses will not be in place should a new crisis hit.
German lender IKB was the first casualty of the financial crash in mid-2007, imploding after pursuing what one banker described as an “all you can eat” strategy, snapping up U.S. subprime mortgage debt.
By the time the worst of the crisis was over in Europe, more than 50 lenders had to be rescued by their governments.
The EU responded with rules governing hedge funds and banker pay. But it has yet to outline a framework law for dealing with banks threatened with collapse, a reform many analysts believe is central in ensuring that bank bondholders – and not the taxpayer – pay to rescue banks in future.
The delicate state of Europe’s banks, which have been faced with the possibility of a chaotic Greek debt default, is partly to blame.
Banks still have trillions of euros of risky loans on their books, and it has taken the near-unlimited offer of funds from the European Central Bank to prevent another credit freeze.
LEEWAY OR LIMIT?
Michel Barnier, the former French foreign minister given the task of leading an overhaul of EU financial regulation two years ago, is due to present his bank salvage plan sometime this year.
But even when he does, the proposed legislation could take three years to become law.
“We can’t afford any more delays,” Olle Schmidt, a liberal who is leading financial reform efforts in the European parliament. “If Europe is to be able to react swiftly to another crisis, these defenses must be in place.”
Diplomats have also clashed over proposed rules governing the amount of capital banks must keep in reserve to cover the risks of lending. This is crucial in preventing another credit boom of the kind that led to the financial crash.
Britain wants more leeway to impose stricter standards on capital than the EU, while France wants the limit capped, reflecting the different way the crisis affected the two neighboring countries.
“The French banking system did OK, albeit with public support, whereas British banks took some serious hits,” said Sony Kapoor, founder of think tank Re-Define.
Overhauling banking is just one of the dossiers keeping diplomats up late at night in the glass and steel buildings of Brussels’s European quarter – working in tandem with colleagues in their home capitals.
While EU leaders have held 17 summits over the past two years to resolve the sovereign debt debacle, diplomats are sifting their way through proposals for regulating derivatives, trading, insider dealing, credit rating agencies and banker pay.
And with most working groups held in English, non-native speakers often struggle to grasp the highly technical issues.
One official recalled an embarrassing misunderstanding, when an ambassador appeared to describe a discussion on hedge funds as being “like a short shit in a long bath.” Participants later concluded he meant “a short sheet on a long bed.”
“Sometimes you understand the words but you don’t understand the meaning,” said one eastern European diplomat.
The final legal text is often as mystifying as the process that created it. “They are unreadable,” said Eddy Wymeersch, a former regulator, commenting on hedge fund rules. “It is just page after page of legalese.”
Bruce Stokes, an analyst with think tank the German Marshall Fund, believes Washington works faster because directly elected members of Congress and not bureaucrats draft legislation. “Brussels is not that accountable,” he said.
Washington drew up the Dodd-Frank act in 2010, a framework for financial reform that includes sweeping changes including bans on banks trading on their own account.
Fleshing out the full detail of these rules will, however, require further work and the European Commission points to its success in moving earlier on banker pay and bank capital.
In Europe, much of the responsibility for rewriting the rulebook for finance falls to the Commission, proposing and writing the first draft of laws that are then sent to European countries and the bloc’s parliament for approval.
“The European legislative system is designed far more for incremental adjustment than for major reform,” said Nicolas Veron, an expert in financial policy who works in both Washington and Brussels. “It’s more bureaucratically driven, but that doesn’t mean that the outcome is not political.”
With things moving so slowly, those working on the dossiers say the new regulations are in danger of being overtaken by events.
“I’ll be retired by the time all of this is done,” said one banker, whose job it is to predict the direction of legislation. “It’s not the kind of work I’d recommend.”
(Writing by Robin Emmott; additional reporting by Claire Davenport, editing by Mike Peacock)
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In meeting rooms of embassies across Brussels, diplomats are haggling over the finer details of dozens of reforms more than four years after the financial crisis that devastated European banks and triggered the euro zone’s struggle with debt.
While the United States agreed in 2010 an initial framework to prevent financiers taking the kind of risks that sparked the deepest global recession since the 1930s, the European Union‘s response is often tangled in backroom diplomacy.
“Bailout is a naughty word these days but we haven’t created a system to deal with failing banks without one,” said a diplomat from a northern European country who is working on around 15 different EU dossiers to regulate finance. “We are still spending hours arguing over the wording of a sentence.”
The crisis revealed how regulators and even top bank executives on both sides of the Atlantic failed to grasp the risks in the complex financial architecture they helped build.
But agreeing new laws among the bloc’s 27 member countries and the European Parliament is becoming so burdensome that diplomats worry Europe‘s defenses will not be in place should a new crisis hit.
German lender IKB was the first casualty of the financial crash in mid-2007, imploding after pursuing what one banker described as an “all you can eat” strategy, snapping up U.S. subprime mortgage debt.
By the time the worst of the crisis was over in Europe, more than 50 lenders had to be rescued by their governments.
The EU responded with rules governing hedge funds and banker pay. But it has yet to outline a framework law for dealing with banks threatened with collapse, a reform many analysts believe is central in ensuring that bank bondholders – and not the taxpayer – pay to rescue banks in future.
The delicate state of Europe’s banks, which have been faced with the possibility of a chaotic Greek debt default, is partly to blame.
Banks still have trillions of euros of risky loans on their books, and it has taken the near-unlimited offer of funds from the European Central Bank to prevent another credit freeze.
LEEWAY OR LIMIT?
Michel Barnier, the former French foreign minister given the task of leading an overhaul of EU financial regulation two years ago, is due to present his bank salvage plan sometime this year.
But even when he does, the proposed legislation could take three years to become law.
“We can’t afford any more delays,” Olle Schmidt, a liberal who is leading financial reform efforts in the European parliament. “If Europe is to be able to react swiftly to another crisis, these defenses must be in place.”
Diplomats have also clashed over proposed rules governing the amount of capital banks must keep in reserve to cover the risks of lending. This is crucial in preventing another credit boom of the kind that led to the financial crash.
Britain wants more leeway to impose stricter standards on capital than the EU, while France wants the limit capped, reflecting the different way the crisis affected the two neighboring countries.
“The French banking system did OK, albeit with public support, whereas British banks took some serious hits,” said Sony Kapoor, founder of think tank Re-Define.
Overhauling banking is just one of the dossiers keeping diplomats up late at night in the glass and steel buildings of Brussels’s European quarter – working in tandem with colleagues in their home capitals.
While EU leaders have held 17 summits over the past two years to resolve the sovereign debt debacle, diplomats are sifting their way through proposals for regulating derivatives, trading, insider dealing, credit rating agencies and banker pay.
And with most working groups held in English, non-native speakers often struggle to grasp the highly technical issues.
One official recalled an embarrassing misunderstanding, when an ambassador appeared to describe a discussion on hedge funds as being “like a short shit in a long bath.” Participants later concluded he meant “a short sheet on a long bed.”
“Sometimes you understand the words but you don’t understand the meaning,” said one eastern European diplomat.
The final legal text is often as mystifying as the process that created it. “They are unreadable,” said Eddy Wymeersch, a former regulator, commenting on hedge fund rules. “It is just page after page of legalese.”
Bruce Stokes, an analyst with think tank the German Marshall Fund, believes Washington works faster because directly elected members of Congress and not bureaucrats draft legislation. “Brussels is not that accountable,” he said.
Washington drew up the Dodd-Frank act in 2010, a framework for financial reform that includes sweeping changes including bans on banks trading on their own account.
Fleshing out the full detail of these rules will, however, require further work and the European Commission points to its success in moving earlier on banker pay and bank capital.
In Europe, much of the responsibility for rewriting the rulebook for finance falls to the Commission, proposing and writing the first draft of laws that are then sent to European countries and the bloc’s parliament for approval.
“The European legislative system is designed far more for incremental adjustment than for major reform,” said Nicolas Veron, an expert in financial policy who works in both Washington and Brussels. “It’s more bureaucratically driven, but that doesn’t mean that the outcome is not political.”
With things moving so slowly, those working on the dossiers say the new regulations are in danger of being overtaken by events.
“I’ll be retired by the time all of this is done,” said one banker, whose job it is to predict the direction of legislation. “It’s not the kind of work I’d recommend.”
(Writing by Robin Emmott; additional reporting by Claire Davenport, editing by Mike Peacock)
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2012年2月13日星期一
Money-Market Fund Flight From French Banks Reverses in January
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February 13, 2012, 7:29 AM EST
By Radi Khasawneh and Alberto Fuertes
Feb. 10 (Bloomberg) — U.S. money-market funds more than doubled their short-term loans to French banks in January, ending six months during which they reduced funding.
The funds owned $8.6 billion of French bank certificates of deposit, time deposits, commercial paper and repurchase agreements on Jan. 31, up from $3.2 billion in December, according to reports from the eight largest prime U.S. funds compiled and published in today’s Bloomberg Risk newsletter. At the end of 2010, the equivalent figure was $78 billion.
French banks have had to increase their deposit base to secure funding after the sovereign-debt crisis spread last year, spurring concern about the solvency of European financial institutions. The revival of U.S. money fund investing followed the European Central Bank’s decision to provide three-year funding for banks in December, allaying some of those concerns.
“There definitely was a shift in sentiment around the second week in January,” said Deborah Cunningham, head of money market funds for Pittsburgh-based Federated Investors Inc. The ECB’s loans and a reversal of “year-end window dressing” in December played the biggest role, she said.
Federated manages $245 billion in U.S.-registered money funds, according to research firm Crane Data LLC.
Societe Generale
The largest beneficiary among the French banks was Societe Generale SA, which increased funding more than 10-fold to $3.4 billion in January. BNP Paribas SA and Credit Agricole SA attracted 50 percent and 43 percent more funding from the U.S. money markets, according to a Bloomberg survey.
Officials for all three banks declined to comment.
The funds cut investments in Swedish and Japanese banks, each of which suffered a $9.7 billion reduction over the month. Swiss banks had 5 percent less funding, though banks from all three countries have retained their haven appeal, with money- market funding surpassing 2010 levels.
The ECB provided 489 billion euros ($651 billion) to European banks through a three-year refinancing operation in December and plans to offer a further series of loans at the end of February.
The survey included the eight largest prime money-market funds: Fidelity Cash Reserves, JPMorgan Prime Money Market Fund, Vanguard Prime Money Market Fund, Fidelity Institutional Prime Money Market Portfolio, BlackRock TempFund, Wells Fargo Advantage Heritage Money Markets Fund and Federated Prime Obligations Fund. Together, they manage $597 billion.
‘More Confidence’
“There are thousands of banks across Europe and we only invest in a small number that we believe to be among the strongest institutions representing minimal risk,” Adam Banker, a spokesman for Fidelity Investments, said in an e-mail.
John Woerth, a spokesman for Vanguard Group Inc., said the firm’s money funds don’t own any French bank debt. Officials for JPMorgan and BlackRock declined to comment. A spokesmen for Wells Fargo didn’t respond to a request for comment.
ECB lending “gave market participants a lot more confidence that liquidity was in that marketplace,” said Cunningham at Federated.
Cunningham said higher short-term interest rates and slightly better economic data also helped encourage money funds to lend more to banks in France and other European countries where they had previously pulled back. Annualized rates for overnight lending to European banks were about 0.18 percent to 0.23 percent in mid-January after dropping to as low as 0.01 just before the end of 2011, Cunningham said.
The lending figures include repurchase agreements, which are backed by collateral such as government debt. Collateral- based repo investments make up a larger part of European overall funding, showing that counterparty risk remains a concern for the funds.
European repo deals amounted to $42.8 billion in January, making up 28 percent of European bank securities held at the funds, up from 21 percent in 2010. French bank repo funding was also 28 percent of the total in January, compared with 6 percent in the fourth quarter of 2010.
–With assistance from Fabio Benedetti-Valentini in Paris and Christian Baumgaertel in Boston. Editors: Keith Campbell, Christian Baumgaertel
To contact the reporters on this story: Radi Khasawneh in London at rkhasawneh1@bloomberg.net; Alberto Fuertes in London at afuertes@bloomberg.net
To contact the editors responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net; Edward Evans at eevans3@bloomberg.net; Nicholas Dunbar at ndunbar1@bloomberg.net
February 13, 2012, 7:29 AM EST
By Radi Khasawneh and Alberto Fuertes
Feb. 10 (Bloomberg) — U.S. money-market funds more than doubled their short-term loans to French banks in January, ending six months during which they reduced funding.
The funds owned $8.6 billion of French bank certificates of deposit, time deposits, commercial paper and repurchase agreements on Jan. 31, up from $3.2 billion in December, according to reports from the eight largest prime U.S. funds compiled and published in today’s Bloomberg Risk newsletter. At the end of 2010, the equivalent figure was $78 billion.
French banks have had to increase their deposit base to secure funding after the sovereign-debt crisis spread last year, spurring concern about the solvency of European financial institutions. The revival of U.S. money fund investing followed the European Central Bank’s decision to provide three-year funding for banks in December, allaying some of those concerns.
“There definitely was a shift in sentiment around the second week in January,” said Deborah Cunningham, head of money market funds for Pittsburgh-based Federated Investors Inc. The ECB’s loans and a reversal of “year-end window dressing” in December played the biggest role, she said.
Federated manages $245 billion in U.S.-registered money funds, according to research firm Crane Data LLC.
Societe Generale
The largest beneficiary among the French banks was Societe Generale SA, which increased funding more than 10-fold to $3.4 billion in January. BNP Paribas SA and Credit Agricole SA attracted 50 percent and 43 percent more funding from the U.S. money markets, according to a Bloomberg survey.
Officials for all three banks declined to comment.
The funds cut investments in Swedish and Japanese banks, each of which suffered a $9.7 billion reduction over the month. Swiss banks had 5 percent less funding, though banks from all three countries have retained their haven appeal, with money- market funding surpassing 2010 levels.
The ECB provided 489 billion euros ($651 billion) to European banks through a three-year refinancing operation in December and plans to offer a further series of loans at the end of February.
The survey included the eight largest prime money-market funds: Fidelity Cash Reserves, JPMorgan Prime Money Market Fund, Vanguard Prime Money Market Fund, Fidelity Institutional Prime Money Market Portfolio, BlackRock TempFund, Wells Fargo Advantage Heritage Money Markets Fund and Federated Prime Obligations Fund. Together, they manage $597 billion.
‘More Confidence’
“There are thousands of banks across Europe and we only invest in a small number that we believe to be among the strongest institutions representing minimal risk,” Adam Banker, a spokesman for Fidelity Investments, said in an e-mail.
John Woerth, a spokesman for Vanguard Group Inc., said the firm’s money funds don’t own any French bank debt. Officials for JPMorgan and BlackRock declined to comment. A spokesmen for Wells Fargo didn’t respond to a request for comment.
ECB lending “gave market participants a lot more confidence that liquidity was in that marketplace,” said Cunningham at Federated.
Cunningham said higher short-term interest rates and slightly better economic data also helped encourage money funds to lend more to banks in France and other European countries where they had previously pulled back. Annualized rates for overnight lending to European banks were about 0.18 percent to 0.23 percent in mid-January after dropping to as low as 0.01 just before the end of 2011, Cunningham said.
The lending figures include repurchase agreements, which are backed by collateral such as government debt. Collateral- based repo investments make up a larger part of European overall funding, showing that counterparty risk remains a concern for the funds.
European repo deals amounted to $42.8 billion in January, making up 28 percent of European bank securities held at the funds, up from 21 percent in 2010. French bank repo funding was also 28 percent of the total in January, compared with 6 percent in the fourth quarter of 2010.
–With assistance from Fabio Benedetti-Valentini in Paris and Christian Baumgaertel in Boston. Editors: Keith Campbell, Christian Baumgaertel
To contact the reporters on this story: Radi Khasawneh in London at rkhasawneh1@bloomberg.net; Alberto Fuertes in London at afuertes@bloomberg.net
To contact the editors responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net; Edward Evans at eevans3@bloomberg.net; Nicholas Dunbar at ndunbar1@bloomberg.net
2012年2月6日星期一
Credit Agricole prepares new financing model
LONDON (ShareCast) – French bank Credit Agricole (Milan: ACA.MI – news) is preparing to change its financing model for its investment and corporate bank, announced general director Jean-Yves Locher, the Financial Times reports. “We will be slimmer, operating in a smaller network of countries and a business model focused on the financing business,” he explained. The new model is expected to be ready by the end of the year. “And we are very much focused on debt capital markets because our customers need more and more to issue bonds,” Locher added. Shares were down 3.65% at €5.13 by 12:14 in Paris. S.B.
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2012年1月17日星期二
S&P downgrades euro zone rescue fund
BRUSSELS (Reuters) – U.S. rating agency Standard & Poor’s cut its credit rating of the euro zone’s EFSF rescue fund on Monday, and Greece was under pressure to break a deadlock in debt swap talks if it is to avoid an unruly default.
French Finance Minister Francois Baroin said there was no need to shore up the European Financial Stability Facility after S&P downgraded it by one notch to AA+ from triple-A, echoing the view of Germany, the only major euro zone member to retain a top-notch credit rating.
S&P said in a statement the decision was all but inevitable following identical cuts three days earlier to the creditworthiness of France and Austria, two of the EFSF’s guarantors.
“We consider that credit enhancements that would offset what we view as the now-reduced creditworthiness of the EFSF’s guarantors and securities backing the EFSF’s issues are currently not in place,” the agency said in a statement.
“We have therefore lowered to AA+ the issuer credit rating of the EFSF, as well as the issue ratings on its long-term debt securities.”
Financial markets, which had fallen after the mass downgrades of euro zone members on Friday, showed little reaction to the latest blow — which had been expected — and Japan, a major buyer of EFSF bonds, said they remained an “attractive” investment.
A growing number of experts, including a Standard & Poor’s official, warned that a Greek default was on the cards, after Greece’s talks with creditors broke down on Friday.
Greece was under growing pressure to secure a last-ditch agreement with its private creditors to accept voluntary losses on their holdings of Greek bonds.
Athens risks going bankrupt when 14.5 billion euros of bond redemptions fall due in late March. Without a private sector bond swap involving a voluntary writedown, a 130 billion euro second international bailout for Greece could fall apart.
The talks with creditor banks broke down because of different views on what interest rate is acceptable, the head of the group leading private sector talks said.
Charles Dallara, managing director of the Institute of International Financial, said the banks were “very surprised” at the stance taken by some officials representing both governments and multilateral institutions, without naming them.
The EFSF was set up by the 17 governments that share the European single currency in May 2010 and has so far been used to provide emergency loans to Ireland and Portugal. It is also expected to contribute to a second bailout of Greece.
The fund has an effective lending capacity of 440 billion euros, which depends on guarantees, mainly from the euro zone’s AAA countries, only four of which now remain: Germany, Luxembourg, Finland and the Netherlands.
LENDING CAPACITY UNAFFECTED
In a statement, the EFSF said the downgrade would not affect its lending capacity, and emphasized that its short-term rating remained at S&P’s top level.
“The downgrade to ‘AA+’ by only one credit agency will not reduce EFSF’s lending capacity of 440 billion euros,” said the fund’s chief executive, Klaus Regling.
“EFSF has sufficient means to fulfill its commitments under current and potential future adjustment programs until the ESM becomes operational in July 2012,” he added.
The ESM — the European Stability Mechanism — is a permanent rescue fund that is expected to have an effective capacity of 500 billion euros, based on paid-in capital of 80 billion euros and callable capital of 620 billion euros.
French Finance Minister Francois Baroin said there was no need to shore up the EFSF despite the S&P rating downgrade.
“The EFSF has kept intact its ability to lend, with enough means and guarantees to fulfill the full range of its present and future commitments,” he said in a statement. “There is therefore no need to act on the EFSF at the moment.”
German Chancellor Angela Merkel’s spokesman, Steffen Seibert told reporters: “The government has no reason to believe that the volume of guarantees that the EFSF has now should not be sufficient to fulfill its current obligations.
“We should not forget that it has been decided to significantly move forward the ESM and to have it in place in mid-2012, one year earlier than planned.”
There was also support from Japan, with Finance Minister Jun Azumi saying Tokyo’s trust in EFSF bonds, in which it has so far invested 21 billion euros, had not been shaken.
“Japan has bought them by certain amounts and our stance will not immediately change just because of the downgrade,” Azumi told reporters after a cabinet meeting.
The euro hovered just above a 17-month trough against the dollar early in Asia on Tuesday, but reaction to the S&P downgrade was muted. Trading overnight was subdued as U.S. markets were shut for the Martin Luther King holiday.
The head of Austria’s debt office told Reuters the loss of Vienna’s AAA status had also been priced into the market already, and Austria was able to sell treasury bills on Monday at rates very close to zero.
French President Nicolas Sarkozy brushed off the historic loss of Paris’ top credit rating for the first time since 1975, a blow to his campaign for re-election in May, saying France’s policy would not be dictated by rating agencies.
Contrasting S&P’s move with a statement by rival watchdog Moody’s, which still has France on an Aaa rating, he said: “My deep belief is that it changes nothing. We must reduce the deficit, we must reduce our spending and we must improve the competitiveness of our economy to return to a path of growth.”
LOSERS TO PAY?
Italian Prime Minister Mario Monti, whose debt-laden country was downgraded by two notches along with Spain, called last week during a visit to Berlin for the EFSF to be increased to ward off attacks on his country’s bonds.
But a senior politician in Merkel’s conservative CDU party, Michael Meister, said it was the downgraded countries that should increase their guarantees for the fund.
“Germany was not downgraded so our contribution should not be changed. Countries that were affected must contribute more to the guarantees,” Meister told Reuters.
Sources familiar with Greece’s talks with its private creditors said EU paymaster Germany was pressing for new bonds to be given to banks in the planned swap to carry a low coupon of less than four percent that would increase the banks’ effective losses to 75 percent.
The IMF was also weighing on the talks by warning that the Greek economy and the euro zone’s economic outlook have worsened since the bailout package was agreed in October, raising Athens’ funding needs to make its debt sustainable by 2020, they said.
Greece put a brave face on the standoff. “There is a little pause in these discussions,” Greek Prime Minister Lucas Papademos told CNBC television. “But I am confident they will continue and we will reach an agreement that is mutually acceptable in time.”
(Additional reporting by Lefteris Papadimos in Athens, Steve Slater and Richard Hubbard in London, Jan Strupczewski in Brussels and Fiona Ortiz in Madrid; Writing by Paul Taylor; Editing by Tim Pearce and Alex Richardson)
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French Finance Minister Francois Baroin said there was no need to shore up the European Financial Stability Facility after S&P downgraded it by one notch to AA+ from triple-A, echoing the view of Germany, the only major euro zone member to retain a top-notch credit rating.
S&P said in a statement the decision was all but inevitable following identical cuts three days earlier to the creditworthiness of France and Austria, two of the EFSF’s guarantors.
“We consider that credit enhancements that would offset what we view as the now-reduced creditworthiness of the EFSF’s guarantors and securities backing the EFSF’s issues are currently not in place,” the agency said in a statement.
“We have therefore lowered to AA+ the issuer credit rating of the EFSF, as well as the issue ratings on its long-term debt securities.”
Financial markets, which had fallen after the mass downgrades of euro zone members on Friday, showed little reaction to the latest blow — which had been expected — and Japan, a major buyer of EFSF bonds, said they remained an “attractive” investment.
A growing number of experts, including a Standard & Poor’s official, warned that a Greek default was on the cards, after Greece’s talks with creditors broke down on Friday.
Greece was under growing pressure to secure a last-ditch agreement with its private creditors to accept voluntary losses on their holdings of Greek bonds.
Athens risks going bankrupt when 14.5 billion euros of bond redemptions fall due in late March. Without a private sector bond swap involving a voluntary writedown, a 130 billion euro second international bailout for Greece could fall apart.
The talks with creditor banks broke down because of different views on what interest rate is acceptable, the head of the group leading private sector talks said.
Charles Dallara, managing director of the Institute of International Financial, said the banks were “very surprised” at the stance taken by some officials representing both governments and multilateral institutions, without naming them.
The EFSF was set up by the 17 governments that share the European single currency in May 2010 and has so far been used to provide emergency loans to Ireland and Portugal. It is also expected to contribute to a second bailout of Greece.
The fund has an effective lending capacity of 440 billion euros, which depends on guarantees, mainly from the euro zone’s AAA countries, only four of which now remain: Germany, Luxembourg, Finland and the Netherlands.
LENDING CAPACITY UNAFFECTED
In a statement, the EFSF said the downgrade would not affect its lending capacity, and emphasized that its short-term rating remained at S&P’s top level.
“The downgrade to ‘AA+’ by only one credit agency will not reduce EFSF’s lending capacity of 440 billion euros,” said the fund’s chief executive, Klaus Regling.
“EFSF has sufficient means to fulfill its commitments under current and potential future adjustment programs until the ESM becomes operational in July 2012,” he added.
The ESM — the European Stability Mechanism — is a permanent rescue fund that is expected to have an effective capacity of 500 billion euros, based on paid-in capital of 80 billion euros and callable capital of 620 billion euros.
French Finance Minister Francois Baroin said there was no need to shore up the EFSF despite the S&P rating downgrade.
“The EFSF has kept intact its ability to lend, with enough means and guarantees to fulfill the full range of its present and future commitments,” he said in a statement. “There is therefore no need to act on the EFSF at the moment.”
German Chancellor Angela Merkel’s spokesman, Steffen Seibert told reporters: “The government has no reason to believe that the volume of guarantees that the EFSF has now should not be sufficient to fulfill its current obligations.
“We should not forget that it has been decided to significantly move forward the ESM and to have it in place in mid-2012, one year earlier than planned.”
There was also support from Japan, with Finance Minister Jun Azumi saying Tokyo’s trust in EFSF bonds, in which it has so far invested 21 billion euros, had not been shaken.
“Japan has bought them by certain amounts and our stance will not immediately change just because of the downgrade,” Azumi told reporters after a cabinet meeting.
The euro hovered just above a 17-month trough against the dollar early in Asia on Tuesday, but reaction to the S&P downgrade was muted. Trading overnight was subdued as U.S. markets were shut for the Martin Luther King holiday.
The head of Austria’s debt office told Reuters the loss of Vienna’s AAA status had also been priced into the market already, and Austria was able to sell treasury bills on Monday at rates very close to zero.
French President Nicolas Sarkozy brushed off the historic loss of Paris’ top credit rating for the first time since 1975, a blow to his campaign for re-election in May, saying France’s policy would not be dictated by rating agencies.
Contrasting S&P’s move with a statement by rival watchdog Moody’s, which still has France on an Aaa rating, he said: “My deep belief is that it changes nothing. We must reduce the deficit, we must reduce our spending and we must improve the competitiveness of our economy to return to a path of growth.”
LOSERS TO PAY?
Italian Prime Minister Mario Monti, whose debt-laden country was downgraded by two notches along with Spain, called last week during a visit to Berlin for the EFSF to be increased to ward off attacks on his country’s bonds.
But a senior politician in Merkel’s conservative CDU party, Michael Meister, said it was the downgraded countries that should increase their guarantees for the fund.
“Germany was not downgraded so our contribution should not be changed. Countries that were affected must contribute more to the guarantees,” Meister told Reuters.
Sources familiar with Greece’s talks with its private creditors said EU paymaster Germany was pressing for new bonds to be given to banks in the planned swap to carry a low coupon of less than four percent that would increase the banks’ effective losses to 75 percent.
The IMF was also weighing on the talks by warning that the Greek economy and the euro zone’s economic outlook have worsened since the bailout package was agreed in October, raising Athens’ funding needs to make its debt sustainable by 2020, they said.
Greece put a brave face on the standoff. “There is a little pause in these discussions,” Greek Prime Minister Lucas Papademos told CNBC television. “But I am confident they will continue and we will reach an agreement that is mutually acceptable in time.”
(Additional reporting by Lefteris Papadimos in Athens, Steve Slater and Richard Hubbard in London, Jan Strupczewski in Brussels and Fiona Ortiz in Madrid; Writing by Paul Taylor; Editing by Tim Pearce and Alex Richardson)
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2012年1月9日星期一
For euro zone, the heat is on again
BERLIN (Reuters) – The euro zone crisis seemed to vanish from the headlines for a brief moment as 2011 ticked over into 2012, but it is about to return with a vengeance.
The coming months will be decisive in determining whether European leaders can hold their increasingly fragile currency bloc together or will stumble in the face of a daunting set of political, economic and financial obstacles lined up in their path at the start of the new year.
In Greece, where the crisis started over two years ago, the government is in a race against time to agree a bond-swap deal with banks that is crucial to a new 130 billion euro bailout package from European partners and the International Monetary Fund (IMF).
Without that package, Athens faces the threat of a debt default in March.
But talks with the banks and investment funds that are being asked to accept 50 percent losses on their Greek bonds to help pay for the bailout have dragged on for weeks, sowing doubts about whether Athens can really deliver.
“The risk of a disorderly Greek default is once again on the rise, with the threat of contagion to Italy and others,” economists at Barclays Capital said last week.
Compounding the challenge, both Greece and France face elections within months that could complicate decision-making at the national level in two key states and thwart the broader bloc’s ability to act swiftly at a time when pressure is high to bed down agreements sealed at an EU summit last month.
A key element of the summit package was a deal to funnel 200 billion euros to the IMF, money that could be used to offer precautionary credit programmes to Italy and possibly Spain.
But the euro zone is struggling to get the 50 billion euros it needs from nations outside the currency bloc to meet its goal. A senior German official told Reuters on condition of anonymity that securing the participation of Britain, which has shown no inclination to contribute, was absolutely crucial.
Even if those funds are secured, neither Italy nor Spain have shown any willingness to accept aid — and the stigma and greater fiscal oversight that would come with it.
Italian 10-year bond yields have pushed back above the 7 percent mark over the past week, approaching record euro-era highs, and both Rome and Madrid must sell bonds this week in the first major market tests of 2012 for the euro zone’s third and fourth biggest economies.
END OF MERKOZY
The Greek election, expected by the end of March, seems unlikely to produce an outright winner, meaning coalition talks could drag out and prolong uncertainty.
In France, polls suggest there is a good chance President Nicolas Sarkozy, who has steered Europe‘s crisis response along with German Chancellor Angela Merkel, could be pushed out of office by his Socialist challenger Francois Hollande.
While Merkel and Sarkozy have polar-opposite temperaments and clashed frequently when the Frenchman first took power in 2007, they are both conservatives, born just half a year apart, and have developed an effective, even close, partnership after years of high-pressure crisis summits.
And after years of frustration with the French president’s shoot-from-the-hip style, government officials in Berlin say they are now worried about the end of “Merkozy”, the most important relationship in Europe, in the middle of the crisis.
A cut in France’s triple-A credit rating in the weeks ahead could also upset the delicate Franco-German balance, although some economists believe it could force the French to accept more far-reaching fiscal reforms, regardless of who wins the two-round election in April and May.
“It won’t be Merkozy anymore. It will be Angela Merkel and (IMF chief) Christine Lagarde dictating policy in Europe,” said French economist Jacques Delpla.
“The next French president, whether its Hollande or Sarkozy, won’t have many options. The deficit will need to be cut, taxes increased and spending cut.”
RECESSION RISK
Fittingly, Merkel and Sarkozy kick off 2012 with a Monday meeting in Berlin to prepare an EU summit scheduled for January 30 that is expected to focus on efforts to boost growth.
That is perhaps the biggest challenge of all for the bloc. After several years of fiscal consolidation to push down debts and deficits swollen by the global financial crisis of 2008/09, the euro zone is headed for recession — a factor that has pushed the euro down to 16-month lows against the dollar.
Even the bloc’s economic powerhouse Germany is at risk of recession. Greece is entering its fifth straight year of contraction, with no hope of paying down its massive debt.
But restoring market confidence in the finances of struggling euro area countries and getting their economies working again seem like contradictory goals at this point.
“In the current market environment there is no room for using a Keynesian-type expansionary fiscal policy to boost demand in countries with low growth – the markets will simply not accept such a strategy,” Deutsche Bank said in a confidential note on the crisis prepared for the German government late last year.
One bright spot is the European Central Bank (ECB), which is showing greater flexibility under its new President Mario Draghi, euro zone officials say.
The ECB’s decision last month to provide cheap long-term loans to banks has helped assuage fears about the financial sector and could support sovereign debt sales going forward.
“We’re already seeing that Draghi is more flexible than Trichet,” the senior German official said, referring to the Italian’s French predecessor Jean-Claude Trichet. “He won’t put a bazooka in the window for everyone to see but he’ll do what it takes.”
The big question is whether this buys Europe’s leaders the time they need to overcome the formidable challenges they face in the new year.
(Reporting by Noah Barkin; Editing by Rosalind Russell)
http://tourism9.com/
The coming months will be decisive in determining whether European leaders can hold their increasingly fragile currency bloc together or will stumble in the face of a daunting set of political, economic and financial obstacles lined up in their path at the start of the new year.
In Greece, where the crisis started over two years ago, the government is in a race against time to agree a bond-swap deal with banks that is crucial to a new 130 billion euro bailout package from European partners and the International Monetary Fund (IMF).
Without that package, Athens faces the threat of a debt default in March.
But talks with the banks and investment funds that are being asked to accept 50 percent losses on their Greek bonds to help pay for the bailout have dragged on for weeks, sowing doubts about whether Athens can really deliver.
“The risk of a disorderly Greek default is once again on the rise, with the threat of contagion to Italy and others,” economists at Barclays Capital said last week.
Compounding the challenge, both Greece and France face elections within months that could complicate decision-making at the national level in two key states and thwart the broader bloc’s ability to act swiftly at a time when pressure is high to bed down agreements sealed at an EU summit last month.
A key element of the summit package was a deal to funnel 200 billion euros to the IMF, money that could be used to offer precautionary credit programmes to Italy and possibly Spain.
But the euro zone is struggling to get the 50 billion euros it needs from nations outside the currency bloc to meet its goal. A senior German official told Reuters on condition of anonymity that securing the participation of Britain, which has shown no inclination to contribute, was absolutely crucial.
Even if those funds are secured, neither Italy nor Spain have shown any willingness to accept aid — and the stigma and greater fiscal oversight that would come with it.
Italian 10-year bond yields have pushed back above the 7 percent mark over the past week, approaching record euro-era highs, and both Rome and Madrid must sell bonds this week in the first major market tests of 2012 for the euro zone’s third and fourth biggest economies.
END OF MERKOZY
The Greek election, expected by the end of March, seems unlikely to produce an outright winner, meaning coalition talks could drag out and prolong uncertainty.
In France, polls suggest there is a good chance President Nicolas Sarkozy, who has steered Europe‘s crisis response along with German Chancellor Angela Merkel, could be pushed out of office by his Socialist challenger Francois Hollande.
While Merkel and Sarkozy have polar-opposite temperaments and clashed frequently when the Frenchman first took power in 2007, they are both conservatives, born just half a year apart, and have developed an effective, even close, partnership after years of high-pressure crisis summits.
And after years of frustration with the French president’s shoot-from-the-hip style, government officials in Berlin say they are now worried about the end of “Merkozy”, the most important relationship in Europe, in the middle of the crisis.
A cut in France’s triple-A credit rating in the weeks ahead could also upset the delicate Franco-German balance, although some economists believe it could force the French to accept more far-reaching fiscal reforms, regardless of who wins the two-round election in April and May.
“It won’t be Merkozy anymore. It will be Angela Merkel and (IMF chief) Christine Lagarde dictating policy in Europe,” said French economist Jacques Delpla.
“The next French president, whether its Hollande or Sarkozy, won’t have many options. The deficit will need to be cut, taxes increased and spending cut.”
RECESSION RISK
Fittingly, Merkel and Sarkozy kick off 2012 with a Monday meeting in Berlin to prepare an EU summit scheduled for January 30 that is expected to focus on efforts to boost growth.
That is perhaps the biggest challenge of all for the bloc. After several years of fiscal consolidation to push down debts and deficits swollen by the global financial crisis of 2008/09, the euro zone is headed for recession — a factor that has pushed the euro down to 16-month lows against the dollar.
Even the bloc’s economic powerhouse Germany is at risk of recession. Greece is entering its fifth straight year of contraction, with no hope of paying down its massive debt.
But restoring market confidence in the finances of struggling euro area countries and getting their economies working again seem like contradictory goals at this point.
“In the current market environment there is no room for using a Keynesian-type expansionary fiscal policy to boost demand in countries with low growth – the markets will simply not accept such a strategy,” Deutsche Bank said in a confidential note on the crisis prepared for the German government late last year.
One bright spot is the European Central Bank (ECB), which is showing greater flexibility under its new President Mario Draghi, euro zone officials say.
The ECB’s decision last month to provide cheap long-term loans to banks has helped assuage fears about the financial sector and could support sovereign debt sales going forward.
“We’re already seeing that Draghi is more flexible than Trichet,” the senior German official said, referring to the Italian’s French predecessor Jean-Claude Trichet. “He won’t put a bazooka in the window for everyone to see but he’ll do what it takes.”
The big question is whether this buys Europe’s leaders the time they need to overcome the formidable challenges they face in the new year.
(Reporting by Noah Barkin; Editing by Rosalind Russell)
http://tourism9.com/
2012年1月3日星期二
The Choice Blog: From the Mail Bag: On Taking a Gap Year
Over the holidays, readers flooded The Choice’s mailbox with thoughtful comments and observations, including on the initial student postings to our first-person “Envelope, Please” series.
In response to Robert Clagett’s essay on gap years, some of you also weighed in on the value of taking time off before college. Many were supportive of taking a break, though several wondered about the financial feasibility of doing so.
As one commenter wrote in response to Mr. Clagett’s advocacy of taking a year off between high school and college:
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In response to Robert Clagett’s essay on gap years, some of you also weighed in on the value of taking time off before college. Many were supportive of taking a break, though several wondered about the financial feasibility of doing so.
As one commenter wrote in response to Mr. Clagett’s advocacy of taking a year off between high school and college:
Great advice in theory, but for some families, like ours, the financial aid consequences can be prohibitive. Our younger son probably would have benefited from a gap year, but when we ran the financial aid calculators, we discovered that it would end up reducing his older brother’s financial aid by about $20,000 and reduce his own financial aid in a few years by about $25,000.Similarly, another commenter wrote:
Lots of kids can’t afford to support themselves for a year without education because they actually derive financial benefits from being a student, whether it be the ability to take out loans that displace expenses for living or an existence in a town that has the amenities that their hometown doesn’t.Another reader provided an example of financing her time off through work abroad. She wrote:
I took a gap year to study French in France, and it set me on a path of lifelong intercultural learning. I paid for it (mostly) myself by being an au pair nanny, which in France (unlike the U.S.) is structured to ensure one gets enough time off for school and cultural immersion each day.As it turns out, Mr. Clagett, former dean of admissions at Middlebury College and a former senior admissions officer at Harvard, was following the discussion. On Tuesday morning he weighed in by e-mail, writing:
To address the economic factor, it’s true that many of the organized programs cost a great deal of money, and that can be a limiting factor for many. But some of the programs (I know of financially needy students who have attended programs like Thinking Beyond Borders and Global Citizen Year in particular, but I suspect there are others as well) offer financial aid to those who need it.Mr. Clagett also addressed the concerns some readers raised about an uneven socioeconomic spread of students who take time off, citing research to dispel the argument that the higher-than-average G.P.A.’s of those who took gap years might actually stem from separate factors of privilege. He wrote:
More important, however, taking a gap year does not have to cost a lot of money. But then it entails more initiative and creativity on the part of the student. I know of one Middlebury student who spent a third of her gap year working at a monastery in North Dakota, a third working for a judge in Oklahoma, and the final third working in an orphanage in the Dominican Republic, all activities that she found on her own. Since she was doing volunteer work for most of the time, her living costs were mostly covered, with little cost to her and her family.
It’s true that since many students who currently take gap years come from more affluent backgrounds, it may not be surprising that most of them would perform more strongly once in college. However, in the analysis that we did with gap year students at Middlebury, we controlled statistically for that factor by comparing their actual G.P.A.’s with how we would have predicted they would perform on the basis of their various academic credentials from high school (in the form of an academic rating assigned by the admissions office that is arrived at on the basis of H.S. grades, rigor of academic program, scores, etc.; at many colleges like Middlebury this academic rating is the best predictor of actual academic performance in college).What do readers of The Choice think of Mr. Clagett’s response? Keep the conversation going by sharing your reactions and general thoughts on gap years in the comment box below.
So when we looked at the G.P.A.’s of gap year students when factoring in their academic credentials from high school, on average they still performed better than we would have expected.
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New Payday Advance Loans Survey Announced By USAPaydayForever.com
While European Stock Markets Go Up A Little Bit, USAPaydayForever.com Announces Payday Advance Loans Survey. They Want To Measure New Customer Experience
(PRWEB) January 03, 2012
Recently at Yahoo news, a financial article explained that while many stock exchanges are closed, some European exchanges had risen lightly. This article stated, “Germany’s DAX, which fell 14.7 percent last year, rose 1.4 percent Monday to 5981.79, while the French CAC-40, which ended 2011 17 percent lower, climbed 0.6 percent to 3,179.17. Stocks fell in South Korea and closed flat in Taiwan.” USAPaydayForever.com thought that this might not necessarily indicate better things to come for world economies. They mentioned that they would continue their payday advance loans promotional campaign this year. They said they would start the year off with a survey, especially considering their recent report of a record number of applications last year.
USAPaydayForever.com continued to express they felt it to be necessary to continue with their payday advance loans promotional campaign this year, regardless of any recent positive news. This is their reasoning for putting out a payday advance loans survey. Such a survey would be used to determine not only customer satisfaction. It would also be used to figure out why people are getting payday advance loans, and how they use them.
Concerning the news about Europeans stocks, as well as their new survey, USAPaydayForever.com has released a statement. This statement said, “We feel it’s important to find out how our customers feel about our payday advance loans. Not only that, but we think it’s important to find out their reasons for using our services, and how they use them. This is especially true whenever we hear reports of positive economic news anywhere in the world. We want to know what kinds of things our customers use our payday advance loans for, if they are using them properly, and how they view them in general.”
About USAPaydayForever.com – USAPaydayForever.com is an online company that helps consumers to find and obtain payday advance loans online. For more information about USAPaydayForever.com, visit their website at http://www.usapaydayforever.com
###
Lehi Drew
http://articlesearchenginemarketing.com/
435-714-0482
Email Information
http://tourism9.com/
(PRWEB) January 03, 2012
Recently at Yahoo news, a financial article explained that while many stock exchanges are closed, some European exchanges had risen lightly. This article stated, “Germany’s DAX, which fell 14.7 percent last year, rose 1.4 percent Monday to 5981.79, while the French CAC-40, which ended 2011 17 percent lower, climbed 0.6 percent to 3,179.17. Stocks fell in South Korea and closed flat in Taiwan.” USAPaydayForever.com thought that this might not necessarily indicate better things to come for world economies. They mentioned that they would continue their payday advance loans promotional campaign this year. They said they would start the year off with a survey, especially considering their recent report of a record number of applications last year.
USAPaydayForever.com continued to express they felt it to be necessary to continue with their payday advance loans promotional campaign this year, regardless of any recent positive news. This is their reasoning for putting out a payday advance loans survey. Such a survey would be used to determine not only customer satisfaction. It would also be used to figure out why people are getting payday advance loans, and how they use them.
Concerning the news about Europeans stocks, as well as their new survey, USAPaydayForever.com has released a statement. This statement said, “We feel it’s important to find out how our customers feel about our payday advance loans. Not only that, but we think it’s important to find out their reasons for using our services, and how they use them. This is especially true whenever we hear reports of positive economic news anywhere in the world. We want to know what kinds of things our customers use our payday advance loans for, if they are using them properly, and how they view them in general.”
About USAPaydayForever.com – USAPaydayForever.com is an online company that helps consumers to find and obtain payday advance loans online. For more information about USAPaydayForever.com, visit their website at http://www.usapaydayforever.com
###
Lehi Drew
http://articlesearchenginemarketing.com/
435-714-0482
Email Information
http://tourism9.com/
2012年1月2日星期一
14 years on, Indonesia back on its feet
Indonesia finally regained an investment grade credit rating from Fitch Ratings, 14 years after losing the status following the country’s worst-ever financial crisis in 1997.
Fitch raised Indonesia’s sovereign rating for long-term foreign and local currency debts to BBB- from BB+, with a stable outlook.
“The upgrades reflect the country’s strong and resilient economic growth, low and declining public debt ratios, strengthened external liquidity and a prudent overall macro policy framework,” said Philip McNicholas, director of Fitch’s Asia-Pacific Sovereign Ratings group.
The BBB- rating is considered an investment grade indicating the country’s low risk for investment. The government is expecting other international rating agencies to follow suit.
Moody’s Investors Service upgraded Indonesia’s rating in January to Ba1, while in April, Standard & Poor’s raised the country’s rating to BB+, with a positive outlook. Both ratings are one level below investment grade.
Indonesia lost the investment grade rating in December 1997, during the Asian financial crisis, which severely hit the country’s financial sector.
Fitch projects GDP growth to average more than 6 per cent per annum over the forecast period (until 2013), despite a less conducive global economic backdrop. Indonesia’s domestically oriented economy and success in delivering relatively strong economic growth without the creation of external imbalances, or a reliance on short-term external financing suggests economic growth prospects should prove resilient to external shocks, as was the case in 2008. Low public debt and positive real interest rates give the authorities policy flexibility to respond to any slowdown.
BI deputy governor Hartadi Sarwono said the upgrade would ensure better economic prospects for Southeast Asia’s largest economy as it minimized investment risks and reduced borrowing costs to support Indonesia’s economic financing.
“An upgrade amid the worsening global economy shows lowering risks for investment, making [Indonesia] more attractive for capital inflows,” Hartadi said in a mobile phone text message.
Rahmat Waluyanto, the director general of the Finance Ministry’s debt management office, said with surging capital inflows, including foreign direct investment (FDI), financing for infrastructure development would be more plentiful.
“Economic growth will accelerate further,” he said.
Finance Minister Agus Martowardojo said the rating upgrade confirmed the market’s positive perception of Indonesia’s debts. He said that without the new rating, Indonesia’s government bond market had been treated as an investment grade-rated nation with lower yields or interest rates compared to investment grade nations.
Fauzi Ichsan, a senior economist at Standard Chartered Bank Indonesia, said the “rating agencies caught up with the bond market”, which had priced sub-investment grade Indonesian and Philippine bonds higher than Italian and Spanish bonds, for example.
The Indonesian government last month collected US$1 billion for seven-year US dollar-denominated Islamic bonds (sukuk) with a yield of 4 per cent, beating out investment grade-rated Italy’s five-year bonds at 6.29 per cent.
Fitch said long-standing structural weaknesses that needed to be resolved were poor physical infrastructure and corruption, which affected the business climate, as well as the low average income of S$3,600 versus the $9,800 average for investment grade nations.
Anggun C. Sasmi says she is “ecstatic” to represent France in the 2012 Eurovision Song Contest.
“The show will be broadcast to millions of people across Europe,” the Indonesian-born singer said.”It’s a great honor.”
Although a French citizen since 2000, she still feels she has a foot in both nations, telling French newspaper Le Parisien that, “I eat as much rice as I do cheese”.
“I miss Indonesia a lot,” Anggun, 37, told The Jakarta Post on Thursday. “The optimism, the generosity, the real sense of the word “family”. I miss the kindness, real kindness. Of course, life is not easy in any part of the world, but in Indonesia you don’t have to fight the wrong fight with the wrong people to obtain something you don’t even want.”
The birth of daughter Kirana, 4, with her French husband Cyril Montana and her role as a UN Goodwill Ambassador in the campaign to end hunger have given her new roles.
“Music gives me balance and identity, but my commitment to the world makes me happy.”
After 17 years abroad, she is considering a return to live in Asia one day. “Now that Kirana goes to school I tend
to get a bit worried about all the bad influences that she can get,” she said.
“I believe life in Asia is much easier because of the amount of kind people around. So, I’ll see about us relocating to Asia, probably Bali.”
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Fitch raised Indonesia’s sovereign rating for long-term foreign and local currency debts to BBB- from BB+, with a stable outlook.
“The upgrades reflect the country’s strong and resilient economic growth, low and declining public debt ratios, strengthened external liquidity and a prudent overall macro policy framework,” said Philip McNicholas, director of Fitch’s Asia-Pacific Sovereign Ratings group.
The BBB- rating is considered an investment grade indicating the country’s low risk for investment. The government is expecting other international rating agencies to follow suit.
Moody’s Investors Service upgraded Indonesia’s rating in January to Ba1, while in April, Standard & Poor’s raised the country’s rating to BB+, with a positive outlook. Both ratings are one level below investment grade.
Indonesia lost the investment grade rating in December 1997, during the Asian financial crisis, which severely hit the country’s financial sector.
Fitch projects GDP growth to average more than 6 per cent per annum over the forecast period (until 2013), despite a less conducive global economic backdrop. Indonesia’s domestically oriented economy and success in delivering relatively strong economic growth without the creation of external imbalances, or a reliance on short-term external financing suggests economic growth prospects should prove resilient to external shocks, as was the case in 2008. Low public debt and positive real interest rates give the authorities policy flexibility to respond to any slowdown.
BI deputy governor Hartadi Sarwono said the upgrade would ensure better economic prospects for Southeast Asia’s largest economy as it minimized investment risks and reduced borrowing costs to support Indonesia’s economic financing.
“An upgrade amid the worsening global economy shows lowering risks for investment, making [Indonesia] more attractive for capital inflows,” Hartadi said in a mobile phone text message.
Rahmat Waluyanto, the director general of the Finance Ministry’s debt management office, said with surging capital inflows, including foreign direct investment (FDI), financing for infrastructure development would be more plentiful.
“Economic growth will accelerate further,” he said.
Finance Minister Agus Martowardojo said the rating upgrade confirmed the market’s positive perception of Indonesia’s debts. He said that without the new rating, Indonesia’s government bond market had been treated as an investment grade-rated nation with lower yields or interest rates compared to investment grade nations.
Fauzi Ichsan, a senior economist at Standard Chartered Bank Indonesia, said the “rating agencies caught up with the bond market”, which had priced sub-investment grade Indonesian and Philippine bonds higher than Italian and Spanish bonds, for example.
The Indonesian government last month collected US$1 billion for seven-year US dollar-denominated Islamic bonds (sukuk) with a yield of 4 per cent, beating out investment grade-rated Italy’s five-year bonds at 6.29 per cent.
Fitch said long-standing structural weaknesses that needed to be resolved were poor physical infrastructure and corruption, which affected the business climate, as well as the low average income of S$3,600 versus the $9,800 average for investment grade nations.
Anggun C. Sasmi says she is “ecstatic” to represent France in the 2012 Eurovision Song Contest.
“The show will be broadcast to millions of people across Europe,” the Indonesian-born singer said.”It’s a great honor.”
Although a French citizen since 2000, she still feels she has a foot in both nations, telling French newspaper Le Parisien that, “I eat as much rice as I do cheese”.
“I miss Indonesia a lot,” Anggun, 37, told The Jakarta Post on Thursday. “The optimism, the generosity, the real sense of the word “family”. I miss the kindness, real kindness. Of course, life is not easy in any part of the world, but in Indonesia you don’t have to fight the wrong fight with the wrong people to obtain something you don’t even want.”
The birth of daughter Kirana, 4, with her French husband Cyril Montana and her role as a UN Goodwill Ambassador in the campaign to end hunger have given her new roles.
“Music gives me balance and identity, but my commitment to the world makes me happy.”
After 17 years abroad, she is considering a return to live in Asia one day. “Now that Kirana goes to school I tend
to get a bit worried about all the bad influences that she can get,” she said.
“I believe life in Asia is much easier because of the amount of kind people around. So, I’ll see about us relocating to Asia, probably Bali.”
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Credit Agricole quits commodity trade as crisis bites
(Reuters) – Credit Agricole will stop trading commodities and will also slash its financing of the multi-billion-dollar market, the most sweeping commodity cuts yet among European banks strained by the euro zone crisis.
Credit Agricole, the formerly farm-focused bank that had boosted its energy trading in recent years, warned on Wednesday of losses and write-downs as it struggles to cope with the credit crunch. The cuts come just weeks after rival Societe Generaleshut down its year-old U.S. gas and power trading desk, and leader BNP Paribas consolidated.
The deepening euro zone debt crisis has hit French banks hard as traditional sources of dollar funding have evaporated and as they face pressure to meet tougher capital requirements.
Volatile commodity prices, dimmer growth prospects and tougher regulation are also forcing some firms to question the outlook for the decade-long boom in trading raw materials.
Cargill Inc., which has voiced a bleaker economic outlook for next year than most of its peers, is cutting 125 jobs worldwide from its energy, transportation and metals operations as part of plans to reduce 2,000 or 1.4 percent of its global workforce over the next six months.
Trade sources said more companies may follow.
“What is happening with Credit Agricole is certainly a major trend across banking where the entire commodities trading business is shrinking,” said a senior commodities trader who recently left a major bank for an independent trading house.
“It is happening because of regulations, as proprietary trading is not allowed any more and because people have overspeculated in the past years and got badly burnt.”
Credit Agricole’s commodities trading employs around 100 staff globally, including traders, analysts, marketing teams and technical staff, sources close to Credit Agricole said.
A source in the bank said many employees had only learned of the closure of the commodities trading unit on Wednesday:
“It has all happened very quickly. It is a shock.”
CREDIT PRESSURE
On Wednesday, Credit Agricole Chief Executive Jean-Paul Chifflet said the bank was pulling out of commodities because it had less expertise in the field than other core areas:
“We preferred to stop it completely and devote our energy to other activities,” he said.
But Chifflet told Les Echos newspaper the bank would not sell its holding in Newedge, a commodities futures and clearing brokerage it co-owns with Societe Generale.
Last year, the head of Credit Agricole’s commodities trading division, Martin Fraenkel, told Reuters energy was a key growth area because “clients of the bank have ever more need for hedging services in these markets”. The bank had just secured a potentially potent tie-up with power trading giant ETF Trading.
But nearly two years on, European banks are under enormous pressure in credit markets and only very large banks have scope to expand. Credit Agricole may be the first of several banks to drop commodities trading, said the senior commodities trader:
“The major players – Goldman Sachs, Morgan Stanley, Merrill Lynch, Deutsche Bank – are still hiring to replace people who leave to funds and trading houses. But small and medium-sized banks are just shutting everything down.”
Morgan Stanley said on Wednesday it would cut 1,600 employees in the first quarter; it did not say how many, if any, would be in its commodities division, which ranks with Goldman Sachs and JP Morgan as one of the three largest in the world.
A senior oil trader at a major European bank said only very large players could now survive in commodities: “They (Credit Agricole) wanted to have a commodities arm but the appetite for risk was so small it was impossible to do big deals.”
Credit Agricole, which has expanded from its agricultural origins in recent years, said on Wednesday it would cut 2,350 jobs and exit 21 of the 55 countries where it operates and shutter entire businesses including equity derivatives.
BNP Paribas, Europe’s trade finance leader in commodities, has been cutting its trade finance portfolio, drastically reducing exposure to small and medium sized oil and metals firms and reselling part of that exposure, bankers say. A spokeswoman declined to comment.
In November, traders said the bank would close its Houston energy trading office and move some of the team to New York. It has also lost a senior metals trader.
Last week, Societe Generaletold employees it would shut down its Stamford, Connecticut-based physical gas and power operation and lay off most of the 140 or so employees at the trading unit it bought less than a year earlier from RBS Sempra.
“VERY, VERY STRONG REDUCTION”
Many details of the changes only emerged on Thursday.
The bank’s commodities derivatives business, trading oil, gas, metals and softs, is based in London and Hong Kong. It also has market representatives in Tokyo, Singapore and New York.
Credit Agricole has been active in oil hedging, traders said, and does not have a reputation for taking on major risk.
“It was very flow-based, rather than proprietary,” said a London-based trader with a bank. He said the bank hedged oil positions for airlines, taking positions on over-the-counter jet fuel derivatives and gas oil on the IntercontinentalExchange.
Sources close to Credit Agricole say the bank also plans to cut dramatically its commodities trade financing, which involve commitments of tens of billions of euros, but the exact scale of the retrenchment was unclear.
“In terms of commodities financing, they plan a very, very strong reduction in their activities,” a source close to Credit Agricole said, adding the full array of short-term and longer-term letters of credit and export credit would be affected.
The bank’s Geneva-based trade finance activities have about 120 people spread around the world, according to a former head of a commodities unit at Credit Agricole Corporate and Investment Banking who left the company just months ago.
Credit Agricole’s commodities financing activities concern around 600 people, of which at least half are in France, and involve commitments of tens of billions of euros.
TOUGH MARKETS
Cargill is not alone among trading houses responding to a disappointing 2011 performance, Swiss-based coal traders said.
Coal has been a particularly tough market for traders this year because prices have been largely stagnant and liquidity has been lower. Without liquidity and volatility, trading profits have been hard to come by.
“We can confirm that as a result of the internal structural changes there have been some personnel changes which will affect around 125 employees in our Energy, Transportation and Metals operations around the world,” a Cargill spokesman said.
Cargill has 600 employees in its Geneva office and around 1,100 worldwide in the non-oil Energy Transportation Industrial (ETI) business group.
Cargill will keep the split in its energy business between oil and non-oil with a global non-oil division made up of coal, gas, power and carbon trading and headed by Frank Rivendal, formerly head of power and gas in the U.S. for Cargill.
“Broadly speaking, the big changes are over and very few have been fired so far but there may be a few more job cuts,” one source said.
“In 2008-2009 everybody made money because prices were so volatile but this year prices have been stagnant and for the first time in a decade, even the big trading houses are facing a downturn in earnings,” he added.
Last month Cargill former head of coal based in Geneva, Patrick Bracken, left to return to the U.S. and Peter Biston, Geneva-based head of power and gas, a junior gas trader and a power trader lost their jobs.
Cargill Ferrous International in November shut its physical steel trading desks in Hong Kong and Geneva and its top sugar trader, Jonathan Drake, left in early December.
“That (restructuring) makes sense. In the previous structure oil made a lot of money and they couldn’t bonus traders as power and gas were down. Now oil can live or die by its own performance,” said Peter Henry, senior consultant with Commodity Search Partners.
(Additional reporting By Jonathan Leff; Editing by David Gregorio)
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Credit Agricole, the formerly farm-focused bank that had boosted its energy trading in recent years, warned on Wednesday of losses and write-downs as it struggles to cope with the credit crunch. The cuts come just weeks after rival Societe Generale
The deepening euro zone debt crisis has hit French banks hard as traditional sources of dollar funding have evaporated and as they face pressure to meet tougher capital requirements.
Volatile commodity prices, dimmer growth prospects and tougher regulation are also forcing some firms to question the outlook for the decade-long boom in trading raw materials.
Cargill Inc.
Trade sources said more companies may follow.
“What is happening with Credit Agricole is certainly a major trend across banking where the entire commodities trading business is shrinking,” said a senior commodities trader who recently left a major bank for an independent trading house.
“It is happening because of regulations, as proprietary trading is not allowed any more and because people have overspeculated in the past years and got badly burnt.”
Credit Agricole’s commodities trading employs around 100 staff globally, including traders, analysts, marketing teams and technical staff, sources close to Credit Agricole said.
A source in the bank said many employees had only learned of the closure of the commodities trading unit on Wednesday:
“It has all happened very quickly. It is a shock.”
CREDIT PRESSURE
On Wednesday, Credit Agricole Chief Executive Jean-Paul Chifflet said the bank was pulling out of commodities because it had less expertise in the field than other core areas:
“We preferred to stop it completely and devote our energy to other activities,” he said.
But Chifflet told Les Echos newspaper the bank would not sell its holding in Newedge, a commodities futures and clearing brokerage it co-owns with Societe Generale
Last year, the head of Credit Agricole’s commodities trading division, Martin Fraenkel, told Reuters energy was a key growth area because “clients of the bank have ever more need for hedging services in these markets”. The bank had just secured a potentially potent tie-up with power trading giant ETF Trading.
But nearly two years on, European banks are under enormous pressure in credit markets and only very large banks have scope to expand. Credit Agricole may be the first of several banks to drop commodities trading, said the senior commodities trader:
“The major players – Goldman Sachs, Morgan Stanley, Merrill Lynch, Deutsche Bank – are still hiring to replace people who leave to funds and trading houses. But small and medium-sized banks are just shutting everything down.”
Morgan Stanley said on Wednesday it would cut 1,600 employees in the first quarter; it did not say how many, if any, would be in its commodities division, which ranks with Goldman Sachs and JP Morgan as one of the three largest in the world.
A senior oil trader at a major European bank said only very large players could now survive in commodities: “They (Credit Agricole) wanted to have a commodities arm but the appetite for risk was so small it was impossible to do big deals.”
Credit Agricole, which has expanded from its agricultural origins in recent years, said on Wednesday it would cut 2,350 jobs and exit 21 of the 55 countries where it operates and shutter entire businesses including equity derivatives.
BNP Paribas, Europe’s trade finance leader in commodities, has been cutting its trade finance portfolio, drastically reducing exposure to small and medium sized oil and metals firms and reselling part of that exposure, bankers say. A spokeswoman declined to comment.
In November, traders said the bank would close its Houston energy trading office and move some of the team to New York. It has also lost a senior metals trader.
Last week, Societe Generale
“VERY, VERY STRONG REDUCTION”
Many details of the changes only emerged on Thursday.
The bank’s commodities derivatives business, trading oil, gas, metals and softs, is based in London and Hong Kong. It also has market representatives in Tokyo, Singapore and New York.
Credit Agricole has been active in oil hedging, traders said, and does not have a reputation for taking on major risk.
“It was very flow-based, rather than proprietary,” said a London-based trader with a bank. He said the bank hedged oil positions for airlines, taking positions on over-the-counter jet fuel derivatives and gas oil on the IntercontinentalExchange.
Sources close to Credit Agricole say the bank also plans to cut dramatically its commodities trade financing, which involve commitments of tens of billions of euros, but the exact scale of the retrenchment was unclear.
“In terms of commodities financing, they plan a very, very strong reduction in their activities,” a source close to Credit Agricole said, adding the full array of short-term and longer-term letters of credit and export credit would be affected.
The bank’s Geneva-based trade finance activities have about 120 people spread around the world, according to a former head of a commodities unit at Credit Agricole Corporate and Investment Banking who left the company just months ago.
Credit Agricole’s commodities financing activities concern around 600 people, of which at least half are in France, and involve commitments of tens of billions of euros.
TOUGH MARKETS
Cargill is not alone among trading houses responding to a disappointing 2011 performance, Swiss-based coal traders said.
Coal has been a particularly tough market for traders this year because prices have been largely stagnant and liquidity has been lower. Without liquidity and volatility, trading profits have been hard to come by.
“We can confirm that as a result of the internal structural changes there have been some personnel changes which will affect around 125 employees in our Energy, Transportation and Metals operations around the world,” a Cargill spokesman said.
Cargill has 600 employees in its Geneva office and around 1,100 worldwide in the non-oil Energy Transportation Industrial (ETI) business group.
Cargill will keep the split in its energy business between oil and non-oil with a global non-oil division made up of coal, gas, power and carbon trading and headed by Frank Rivendal, formerly head of power and gas in the U.S. for Cargill.
“Broadly speaking, the big changes are over and very few have been fired so far but there may be a few more job cuts,” one source said.
“In 2008-2009 everybody made money because prices were so volatile but this year prices have been stagnant and for the first time in a decade, even the big trading houses are facing a downturn in earnings,” he added.
Last month Cargill former head of coal based in Geneva, Patrick Bracken, left to return to the U.S. and Peter Biston, Geneva-based head of power and gas, a junior gas trader and a power trader lost their jobs.
Cargill Ferrous International in November shut its physical steel trading desks in Hong Kong and Geneva and its top sugar trader, Jonathan Drake, left in early December.
“That (restructuring) makes sense. In the previous structure oil made a lot of money and they couldn’t bonus traders as power and gas were down. Now oil can live or die by its own performance,” said Peter Henry, senior consultant with Commodity Search Partners.
(Additional reporting By Jonathan Leff; Editing by David Gregorio)
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Credit Agricole to cut jobs as loss looms
PARIS (Reuters) – Credit Agricole will make a 2011 loss, write off 2.5 billion euros ($3.2 billion) worth of assets and cut 2,350 jobs in a cull of its investment banking operations, the French bank said on Wednesday in its second profit warning of the year.
The warning reflects mounting pressure on lenders to curtail risky activities to meet tougher capital standards even as they wrestle worsening economies and slumping markets. The deepening euro zone debt crisis has slammed French banks in particular as traditional sources of dollar funding have evaporated.
“These are all things we would have expected to happen at some point, but putting it all in one quarter, in this kind of market, is unhelpful,” said a London based analyst who did not want to be named. “The stock is at bombed-out levels already … What will be key in how bad this gets is what they tell us about the ongoing business.”
The bank is following in the footsteps of larger domestic rivals BNP Paribasand Societe Generale , which have also announced job cuts primarily in investment banking as they seek to cut debt and wean themselves off funding markets frozen by the economic slump.
The pressure on the French banks’ capital and liquidity has led to recurring speculation that they could eventually seek a government bailout, but Credit Agricole Chief Executive Jean-Paul Chifflet denied that it would need any help in reaching stringent Basel III regulations.
“We will meet Basel III with our own resources,” he told a conference call.
That will call for some bitter medicine.
Credit Agricole, which in recent years abandoned its humble agricultural origins in favor of international growth, will exit 21 of the 55 countries where it operates and shutter entire businesses like equity derivatives and commodities.
MARKET TURMOIL
The writedown includes 1.3 billion euros to reflect the shrinkage of its investment banking division and 1.23 billion euros as writedowns of minority stakes, such as those in Spain’s Bankinterand Portugal’s Banco Espirito Santo .
Chifflet said in an interview with Les Echos newspaper that the bank was mulling the sale of stakes in both lenders, although he ruled out the sale of its holding in its Newedge joint venture with Societe Generale.
The bank also shelved its 2014 financial goals and eliminated its dividend for this year to preserve capital.
Analysts had expected France’s No. 3 lender to post a full-year profit of 2.4 billion euros after it was profitable in all previous quarters.
In July, Credit Agricole warned that deepening problems at its Emporiki Bank unit in Greece would wipe nearly 1 billion euros off its first-half results.
The job losses include 1,750 at Credit Agricole’s corporate and investment bank, which employs 13,000 people, and 600 at its factoring and consumer finance arms.
The bulk of the job losses will take place internationally, although 550 investment banking and 300 consumer finance jobs will be cut in France.
Credit Agricole shares slumped 6.7 percent to close at 4.23 euros, part of a wider rout in French banking shares which saw Societe Generaleslide 8 percent and BNP Paribas lose 7.4 percent.
More than six months of intense market turmoil sparked by the euro zone debt crisis is pummeling investment banks globally, denting their bond and stock trading income and sparking a wave of layoffs in Asia, the U.S. and Europe.
JOB LOSS TALLY GROWS
Citigroup was last week among the latest to press ahead with job cuts, while banks in some of the crisis hotspots — such as Italy’s UniCreditand Intesa Sanpaolo — are also laying off thousands of people.
More than 120,000 job losses have been announced this year, and many in the industry fear the tally will be greater than at the height of the financial crisis in 2008, as redundancies continue into 2012.
Like its French rivals, Credit Agricole is primarily pulling back in certain financing businesses, such as those in dollars, which have become harder for it to access, and will cut staff accordingly.
It also has a European equity broker, Chevreux, and a majority stake in Asian brokerage CLSA. But the bulk of cuts are likely to fall in fixed-income, which houses its rates and credit divisions, analysts said.
Credit trading in particular has come under pressure at all banks this year as wary investors shy away from the market and new regulation bites.
The recently appointed Chifflet has espoused a back-to-basics focus on retail banking in France and Europe after moves like the purchase of Emporiki backfired, rendering it deeply sensitive to turmoil in the eurozone economy.
Chifflet’s team is mulling various ways of bolstering the bank’s balance sheet, banking sources say, even though Credit Agricole’s robust parent network of regional banks has provided a cushion that has made raising additional capital unnecessary.
This may include more deal-making. The bank is close to announcing the sale of its private-equity activities, while it has also struck a $374 million deal to sell minority stakes in its CLSA and Cheuvreux brokerage brands to Chinese brokerage Citic Securities .
While Credit Agricole would be open to letting Citic increase its stake in the ventures — now at 19.9 percent — it aims to at least keep majority control, according to a person familiar with the bank’s thinking.
(Editing by David Holmes)
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The warning reflects mounting pressure on lenders to curtail risky activities to meet tougher capital standards even as they wrestle worsening economies and slumping markets. The deepening euro zone debt crisis has slammed French banks in particular as traditional sources of dollar funding have evaporated.
“These are all things we would have expected to happen at some point, but putting it all in one quarter, in this kind of market, is unhelpful,” said a London based analyst who did not want to be named. “The stock is at bombed-out levels already … What will be key in how bad this gets is what they tell us about the ongoing business.”
The bank is following in the footsteps of larger domestic rivals BNP Paribas
The pressure on the French banks’ capital and liquidity has led to recurring speculation that they could eventually seek a government bailout, but Credit Agricole Chief Executive Jean-Paul Chifflet denied that it would need any help in reaching stringent Basel III regulations.
“We will meet Basel III with our own resources,” he told a conference call.
That will call for some bitter medicine.
Credit Agricole, which in recent years abandoned its humble agricultural origins in favor of international growth, will exit 21 of the 55 countries where it operates and shutter entire businesses like equity derivatives and commodities.
MARKET TURMOIL
The writedown includes 1.3 billion euros to reflect the shrinkage of its investment banking division and 1.23 billion euros as writedowns of minority stakes, such as those in Spain’s Bankinter
Chifflet said in an interview with Les Echos newspaper that the bank was mulling the sale of stakes in both lenders, although he ruled out the sale of its holding in its Newedge joint venture with Societe Generale.
The bank also shelved its 2014 financial goals and eliminated its dividend for this year to preserve capital.
Analysts had expected France’s No. 3 lender to post a full-year profit of 2.4 billion euros after it was profitable in all previous quarters.
In July, Credit Agricole warned that deepening problems at its Emporiki Bank unit in Greece would wipe nearly 1 billion euros off its first-half results.
The job losses include 1,750 at Credit Agricole’s corporate and investment bank, which employs 13,000 people, and 600 at its factoring and consumer finance arms.
The bulk of the job losses will take place internationally, although 550 investment banking and 300 consumer finance jobs will be cut in France.
Credit Agricole shares slumped 6.7 percent to close at 4.23 euros, part of a wider rout in French banking shares which saw Societe Generale
More than six months of intense market turmoil sparked by the euro zone debt crisis is pummeling investment banks globally, denting their bond and stock trading income and sparking a wave of layoffs in Asia, the U.S. and Europe.
JOB LOSS TALLY GROWS
Citigroup was last week among the latest to press ahead with job cuts, while banks in some of the crisis hotspots — such as Italy’s UniCredit
More than 120,000 job losses have been announced this year, and many in the industry fear the tally will be greater than at the height of the financial crisis in 2008, as redundancies continue into 2012.
Like its French rivals, Credit Agricole is primarily pulling back in certain financing businesses, such as those in dollars, which have become harder for it to access, and will cut staff accordingly.
It also has a European equity broker, Chevreux, and a majority stake in Asian brokerage CLSA. But the bulk of cuts are likely to fall in fixed-income, which houses its rates and credit divisions, analysts said.
Credit trading in particular has come under pressure at all banks this year as wary investors shy away from the market and new regulation bites.
The recently appointed Chifflet has espoused a back-to-basics focus on retail banking in France and Europe after moves like the purchase of Emporiki backfired, rendering it deeply sensitive to turmoil in the eurozone economy.
Chifflet’s team is mulling various ways of bolstering the bank’s balance sheet, banking sources say, even though Credit Agricole’s robust parent network of regional banks has provided a cushion that has made raising additional capital unnecessary.
This may include more deal-making. The bank is close to announcing the sale of its private-equity activities, while it has also struck a $374 million deal to sell minority stakes in its CLSA and Cheuvreux brokerage brands to Chinese brokerage Citic Securities .
While Credit Agricole would be open to letting Citic increase its stake in the ventures — now at 19.9 percent — it aims to at least keep majority control, according to a person familiar with the bank’s thinking.
(Editing by David Holmes)
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