Quote of the Day: European banks need at least €350bn to €400bn
of new capital. Our top-down and bottom-up work combined with OECD estimates
point to a material deficit, two-thirds of which is in the Eurozone. The
estimates ignore upside risk from adopting depositor preference. Options to
plug the deficit include contingent capital – not CoCos (which do not work, in
our view), but forms of standby capital. – Berenberg:
Previously on
MoreLiver’s:
Roundups &
Commentary
Frontrunning – ZH
Overnight: Any news is good news continues – ZH
The Lunch Wrap – alphaville
/ FT
Emerging N.Y. headlines – beyondbrics / FT
Midday Express (EU daily
news) – Europa
Daily press summary – Open Europe
Morning MoneyBeat: So Far, ‘Sell in May’ Has Not Been the Way – WSJ
– Marc to Market
EUROPE
Controlled
dismantlement of the Eurozone: A proposal for a New European Monetary System
and a new role for the European Central Bank – NBP (pdf)
National Bank of Poland Working papers by Stefan Kawalec, Ernest
Pytlarczyk
Analysis: Fund could
recycle German savings to euro strugglers – Reuters
What if German savers were to help rescue Greece, Portugal or Spain by investing in
their state assets and companies rather than bailing them out with
taxpayer-backed loans?
The EU is facing a crisis of legitimacy. The most extreme, but not only,
manifestation is in the UK, where citizens may
vote to quit the EU. Reforms are needed to stop Brussels interfering in
things best left to nations.
Another month, another listless set of business surveys is likely to
show this week just how much the euro zone economy still has to do to get over
its debilitating debt and banking crisis.
Euro area government
debt up to 92.2% of GDP – Eurostat
PIIGS
Spanish Sunshine
Season Overshadowed by Growth Doubts – BB
Portuguese President Says Coelho Government
Will Stay in Office – BB
A former IMF official
has said Ireland needs to move away from austerity measures if the country's economy is
to grow.
UNITED STATES
Why new leverage ratios rules could stifle repo
markets – alphaville
/ FT
Earlier this month the
Fed, together with the Office of the Comptroller of the Currency and the FDIC,
proposed a leverage ratio rule for big US banks earlier this month.
Based on the earnings
releases so far in the S&P 500 earnings, surprises are a bad predictor for
two-day excess return. Where's the proof? Just take the example of those
results at Advanced Macro Devices as illustration.
Weekend Sentiment Summary (July Week 3) – The
Short Side of the Long
Why Larry Summers Should Not Be Permitted to
Run Anything More Important than a Dog Pound – naked
capitalism
ASIA
Ambrose
Evans-Pritchard: China is sliding towards a deflation trap and may be in outright recession
already if data are measured accurately, with serious knock-on risks for the
global economy.
Chinese financial reform: easy pickings – beyondbrics
/ FT
China is often accused of only picking the low-hanging fruit when it comes to
policy making. In its decision to liberalise lending rates over the weekend, it
didn’t even manage that. This apple had already dropped off the branch.
Bankers, Analysts Divided Over Impact of
Interest Bank Move – WSJ
Was it simply a
symbolic move, as many bank analysts have been quick to claim? Or can we expect
real impacts?
In themselves, the
changes announced on Friday are expected to have very limited effects. Or… will
they?
The biggest step yet
by China’s new leaders to move the nation’s financial
system toward market-set lending rates heightens focus on what the central bank
says is an even tougher reform: lifting restrictions on savers’ returns.
Abe the “Internationalist”? – The
Diplomat
Japanese Prime
Minister Shinzo Abe has now officially exorcised the demons that have haunted
him since his stinging resignation as leader in 2007.
Abe vows to keep focus on economy after win – Reuters
Japanese Prime
Minister Shinzo Abe, fresh from a strong election victory, vowed to stay
focused on reviving the stagnant economy and sought to counter suspicions he
might instead shift emphasis to his nationalist agenda.
OTHER
Financial Forecast
Update July 2013 – Nordea
(pdf)
…or read the summary.
FINNISH
Ruotsi lyö Suomen talouden maaottelussa – HS
Erot
ostovoimassa selittävät, miksi Ruotsin talouden ennustetaan kasvavan Suomea
paremmin
Kruunu vetää rahaa turvakohteena – HS