Fed adopts tough capital rules for foreign banks

Tue, Feb 18 2014

By Douwe Miedema

WASHINGTON (Reuters) - The Federal Reserve on Tuesday adopted tight new rules for foreign banks to shield the U.S. taxpayer from costly bailouts, ceding only minor concessions despite pressure from abroad to weaken the rule.

Foreign banks with sizable operations on Wall Street such as Deutsche Bank and Barclays had pushed back hard against the plan because it means they will need to transfer costly capital from Europe.

The Fed, which oversees foreign banks, gave them a year longer to meet the standards, and applied it to fewer banks than in a first draft, but the rule was largely unchanged from when it was first proposed in December 2012.

A Test Europe’s Banks Mustn’t Fail

By FRANCESCO GIAVAZZI and ANIL K. KASHYAPFEB. 17, 2014

The New York Times

Europe is lurching toward an overhaul of its banking system. Later this year, the European Central Bank is set to assume the authority to supervise the 130 largest banks in the euro zone — a momentous process of centralizing financial regulation in Frankfurt aimed at preventing another round of the bank failures that contributed to the 2007-8 global financial crisis.

In preparation for the handoff, the E.C.B. will conduct a “stress test” to gauge how the banks would fare if economic conditions deteriorated. But the central bank’s point person for these efforts, Danièle Nouy, appears to have misdiagnosed the problem, suggesting that “insufficient transparency regarding the balance sheets of the European banks” is the critical problem.

Laser-sparked fusion power passes key milestone

NEWSCIENTIST

12 February 2014 by Jacob Aron

CLEAN energy inspired by the stars is the dream of scientists pursuing nuclear fusion, in which atomic nuclei fuse together and release energy. In a first for laser-driven fusion, scientists at a US lab say they have reached a key milestone called fuel gain: they are producing more energy than the fuel absorbed to start the reaction.

But the National Ignition Facility (NIF) in Livermore, California, is still a long way from sparking a self-sustaining fusion reaction with an overall gain in energy – a process called ignition. Currently, the reactor as a whole needs more energy to operate than the amount that is produced.

A workable euro zone fitness regime

February 17, 2014 @ 9:42 am

By Hugo Dixon

Reuters

The euro zone has gone from the emergency room to rehab. As often with patients, the question is how to maintain a stiff exercise regime now the immediate danger is over.

Germany has an idea. At December’s summit, it got the rest of the zone to agree in principle to what are called “partnerships for growth, jobs and competitiveness”. The idea is that governments will sign contracts committing them to do things like reform their labour markets, liberalise product markets and improve the efficiency of their public sectors. Countries such as Greece and Cyprus, which are already in bailout programmes, wouldn’t be covered.

France and Germany Lead Euro Zone to Higher Growth

By DAVID JOLLYFEB. 14, 2014

The New York Times

PARIS — The euro zone economy grew slightly faster than expected in the last three months of 2013, an official report showed on Friday, bringing welcome news for the global economy amid signs of slowing in the United States and China.

Although growth in the 18-nation currency union is still weak, at a 1.1 percent annualized rate, it was the euro zone’s third straight quarter in positive territory, indicating that the bloc is well beyond the year-and-a-half recession that ended in mid-2013.

Regling: euro-zone banks in good shape before stress test: newspaper

BERLIN Sun Feb 16, 2014 5:55pm EST

(Reuters) - The head of the euro zone's bailout funds, Klaus Regling, said that he believes banks in Spain, Portugal, Cyprus, Greece and Ireland are in good shape and that there will not be any surprises in European Central Bank stress tests due later in 2014.

Banks in London Devise Way Around Europe’s Bonus Rules

FEBRUARY 13, 2014, 7:32 PM

The New York Times

By JENNY ANDERSON and PETER EAVIS

A battle over banker bonuses is building in this financial capital.

Since the 2008 crisis, regulators around the world have tried to rein in bonuses, worried that big payouts encourage excessive risk-taking by bankers and traders. The European Union has gone further than most, limiting bankers to bonuses equal to one or two times their salaries.

But the bank giants operating in London — including Goldman Sachs, Bank of America Merrill Lynch and Barclays — are seeking to outflank the new restrictions. Responding to the law, they are structuring new pay packages that try to satisfy both their emboldened regulators and their very expensive employees.

It's The Euro, Stupid

Frances Coppola, Contributor

I write about banking, finance and economics.

FORBES

A few days ago the German constitutional court referred the question of the legality of the ECB’s Outright Monetary Transactions (OMT) to the European Court of Justice (ECJ), claiming that the ECB was straying into fiscal policy that was beyond its mandate and that OMT breached EU treaty directives outlawing monetary financing of governments.

Eurozone watchdog says some banks should go under: FT

FRANKFURT/LINKOPING, Sweden Mon Feb 10, 2014 2:04pm EST

(Reuters) - Some of the euro zone's lenders have no future and should be allowed to go under if they fail a health check, the bloc's new banking supervisor told the Financial Times, underscoring a tougher approach to banking oversight.

Daniele Nouy told the newspaper that if any of the region's participating banks fail the European Central Bank's comprehensive assessment then they could be wound down, and that merging them in order to save them was not an option.

River Thames Bursts Banks, Flooding Homes Near London

Flooding Follows Wettest January Since 1776

The Wall Street Journal

By NICHOLAS WINNING

Updated Feb. 10, 2014 7:46 p.m. ET

LONDON—Hundreds of homes have flooded and hundreds more are at risk to the west of London after the River Thames burst its banks on Monday as England continued to suffer from one of the wettest winters in more than two centuries, authorities said.

With waters predicted to rise further this week, Prime Minister David Cameron said the government would do all it could to assist those affected as he visited flood-hit areas in the southwest of England.

Berlin: George Clooney Tells U.K. to Return Art Treasures to Greece

At the press conference for his film "The Monuments Men," Clooney said Greece had "a very good case" in demanding Britain return treasures such as the Elgin Marbles.

George Clooney has called on the U.K. to act as real “Monuments Men” and return historic Greek art  held in British museums.

EU Said to Weigh Extending Greek Loans to 50 Years

By Nikos Chrysoloras and Rebecca Christie  Feb 5, 2014 5:44 PM GMT+0200

Bloomberg

The next handout to Greece may include extending the maturity on rescue loans to 50 years and cutting the interest rate on some previous aid by 50 basis points, according to two officials with knowledge of discussions being held by European autorities.

The plan, which will be considered by policy makers by May or June, may also include a loan for a package worth between 13 billion euros ($17.6 billion) and 15 billion euros, another official said. Greece, which got 240 billion euros in two bailouts, has previously had its terms eased by the euro zone and International Monetary Fund amid a six-year recession.

UPDATE 1-Greece's 2014 fiscal gap issue largely resolved with lenders-sources

Tue, Feb 4 2014

By Karolina Tagaris , Lefteris Papadimas and Jan Strupczewski

ATHENS/BRUSSELS, Feb 4 (Reuters) - Greece and its foreign lenders have largely bridged differences over a potential fiscal gap this year, removing a key sticking point holding up talks to release more bailout funds, two sources directly involved in the talks said on Tuesday.

The latest review of Greece's progress under its European Union/International Monetary Fund bailout has dragged on since September in large part due to wrangling over how Athens would plug a gap in this year's budget, which had been estimated at 1 billion euros.

Greek leftist seeks negotiated debt write-off

Tue, Feb 4 2014

By Paul Taylor

PARIS, Feb 4 (Reuters) - Greece would seek to negotiate an international write-off of about one-third of its debt if the leftist Syriza opposition party won a general election, its leader said on Tuesday.

Alexis Tsipras, who is leading a Communist-backed pan-European leftist list in European Parliament elections in May, said his country's problems could not be solved by more loans, which just went to service past debts and shore up the banks.

"The solution isn't more loans. The solution is fewer loans and less debt," Tsipras, whose party leads Prime Minister Antonis Samaras' conservative New Democracy in opinion polls, told the Europresse association on a visit to Paris.

New Boss at Microsoft, With Gates at His Side

By NICK WINGFIELDFEB. 4, 2014

SEATTLE — Bill Gates is back in the building at Microsoft.

On Tuesday, Microsoft announced that Mr. Gates, a longtime titan of the tech industry, was shedding his role as chairman to dig in more with products and technology at the company, which he co-founded nearly 40 years ago.

At the same time, he is expected play a distinctly secondary role to Satya Nadella, whom Microsoft named as its new chief executive. Mr. Nadella asked Mr. Gates to become a part-time adviser to him, a change that comes with great potential upsides for the company, but some potential land mines, too.

No end in sight to 'pain' of betting on weaker euro

BY ANIRBAN NAG

LONDON Tue Feb 4, 2014 11:13am EST

(Reuters) - Anyone betting against the euro may well find this strategy remains a "pain trade", even though the common currency has fallen to a 10-week low against the dollar this week.

This drop looks unlikely to be the long-awaited breakout in what has been one of the world's most stable free exchange rates and, in a remarkable change of fortunes, the euro zone is showing signs of becoming a safe haven.

Earthquake strikes off western coast of Greece, USGS says

By Jethro Mullen, CNN

February 3, 2014 -- Updated 0957 GMT (1757 HKT)

(CNN) -- A magnitude-6.1 earthquake struck off the western coast of Greece early Monday, the U.S. Geological Survey reported.

The quake hit near the island of Cephalonia, roughly 300 kilometers (185 miles) west of Athens, at a depth of about 14 kilometers (9 miles), the USGS said.

There were no immediate reports of damage or casualties.

Euro May Be Resurfacing as a Safe Haven

Currency Is Bucking Old Trend of Wilting Amid Headwinds

By TOMMY STUBBINGTON

Updated Feb. 3, 2014 3:11 p.m. ET

LONDON—Over the past few years, the euro has been a barometer of risk: When the markets got cloudy, it fell. But in recent weeks, that relationship has changed, leading some analysts to wonder whether Europe, after years of crisis, is becoming a haven again.

When emerging markets took a steep fall in the past few weeks, dragging global assets with them, the euro shrugged it off. On some days, the currency has even managed to rally while stocks are crashing—a tendency usually associated with the Japanese yen or the U.S. dollar.

Germany preparing third financial rescue for Greece

New loan, outlined in a German finance ministry position paper, would be worth €10bn-€20bn, says Der Spiegel magazine

Helena Smith in Athens

The Guardian, Sunday 2 February 2014 20.14 GMT

Greek Bank Deposits Post First Annual Increase in Four Years

By Marcus Bensasson  Jan 29, 2014 6:38 PM GMT+0200

Bloomberg

Greek bank deposits rose 1.1 percent in 2013, the first annual increase since Greece triggered the euro area debt crisis in 2009.

Deposits rose to 163.3 billion euros ($222 billion) in December, from 161 billion euros in November and 161.5 billion euros a year earlier, the Bank of Greece said in a statement on its website today. Deposits are 31 percent below their peak of 237.8 billion euros in September 2009.