Basel III: Now the hard part for European banks

New banking rules will squeeze capital and profits. But there are ways that banks can cope.

At this month’s G-20 summit in Seoul, South Korea, global leaders endorsed the new rules on bank capital and funding issued by the Basel Committee on Banking Supervision. Now, banks in Europe and the United States face the challenge of finding ways to substantially boost their stocks of capital and funding under the new rules, which are intended to make the international banking system more resilient by addressing many of the flaws that became apparent during the credit crisis.

Our research suggests that the task will not be easy. Barring any mitigating actions, we estimate that banks in Europe and the United States will have to raise about €1.65 trillion of new capital, about €1.9 trillion of short-term liquidity, and about €4.5 trillion of long-term funding. The capital shortfall is equivalent to about 60 percent of all outstanding Tier 1 capital, and the short-term liquidity gap is about 50 percent of all the liquidity that banks currently hold. Banks are already mobilizing to reprice assets and cut costs further. Whatever they do, the new rules are sure to dent their profits. Our analysis shows that these rules could reduce return on equity (ROE) for the average European bank by between 3.7 and 4.3 percentage points by 2019, from the pre-crisis ROE average of 15 percent (pre-tax). Some banks might be hit even harder.

We believe banking leaders can respond through several actions. Among them is a set of “no regret” interventions to reduce capital and liquidity inefficiency. Banks can go further to restructure their balance sheets to improve the quality of capital and funding while also developing approaches to manage these scarce resources more thoughtfully. Some banks may recover up to 1.5 percentage points of ROE through these steps. Finally, several banks may seize the opportunity to effect substantial changes to their business model, making it more capital- and liquidity-efficient, adding new products, or scaling back some capital-intensive businesses. These steps may also help banks regain lost ground.

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Rendimenti Spagna: superato il punto di NON ritorno

Crisi Spagna. Bonos 10 anni: rendimento stabilmente sopra il 7%. Asta di oggi: tassi praticamente raddoppiati a 12 mesi. La storia insegna che…

Il problema era Atene? Risposta sbagliata.
Bastava fare le elezioni n Grecia per far tornare l’euforia? Assolutamente no. La Grecia rappresenta una tappa. Il problema grande continua ad essere sempre lei, la Spagna con le sue banche.

Ieri il decennale spagnolo (Bonos 10yr) si è stabilmente collocato sopra la soglia critica del 7%. Ed il mercato non ha potuto far altro che aumentare il suo nervosismo , soprattutto nei confronti di chi rappresenta il massimo rischio a livello volumetrico: Spagna ed Italia.
Ricordate cosa dicevo in questo post del 01/06/2012?

E’ assolutamente evidente che, quando il bond a 10 annni rompe al rialzo il tasso del 7%, succede un qualcosa di decisamente negativo. Scatta un vero sell off che comporta non solo il crollo del prezzo dei bond ma un inevitabile aumento dei rendimenti, con tutto quello che ne consegue come effetto domino (costi, speculazione, paura, ecc ecc).

Riprendetevi questo post (ne vale la pena, anche per le tabelle che troverete in esso) meditate. Ieri la Spagna come detto ha superato in modo stabile il livello del 7% (ora al 7.20%)

Ovviamente hanno influito anche le voci PRIMA CITATE di una possibile insufficienza del piano di bailout per le banche spagnole. E ovviamente hanno influito i dati sulle sofferenze bancarie: pari all’8.72% sul totale, ovvero circa 153 miliardi di Euro (le previsioni sono di un rapido superamento di quota 9%). E l’asta di oggi a 12-18 mesi non è certo stata entusiasmante a livello di rendimenti. I titoli a 12 mesi hanno un rendimento che passa dal 2.985% dell’asta precedente al 5.074%, e a 18 mesi si passa dal 3.302% al 5.10%. La curva si appiattissce verso l’altro. il mercato teme il default nell’arco dei prossimi 24 mesi.
Grafico rendimento Bonos ESP 10yr

Questo è un segnale fortissimo. La Spagna è FORTEMENTE a rischio… il cosiddetto “punto di non ritorno” è stato superato (noi per fortuna viaggiamo sul 10yr al 6% ma non abbassiamo la guardia) e se la storia insegna….

Greece Votes With Euro at Stake on Eve of Global Summit

Supporters of Antonis Samaras, leader of Greece's
New Democracy party, during a pre-election rally in
Athens on June 15, 2012. Photographer: Chris
Ratcliffe/Bloomberg

Greece Votes With Euro at Stake on Eve of Global Summit

Greeks started voting for the second time in six weeks in an election that may determine the fate of the euro currency as global leaders gather for their annual summit.
With 21 parties on the ballot, the main event pits Syriza leader Alexis Tsipras, who has promised to renege on budget cuts demanded by creditors in exchange for a pair of bailouts, against New Democracy's Antonis Samaras, who says his challenger is risking an exit from the currency union.
"The first thing we must determine in the elections on June 17 is to choose between the euro or drachma," Samaras said in his final appeal June 15 in Athens. The night before, Tsipras told supporters to "turn your backs on the two parties of bankruptcy," urging them to reject the two main parties.
The vote will turn on whether Greeks, in a fifth year of recession, accept open-ended austerity to stay in the euro or reject the bailout conditions and risk the turmoil of exiting the 17-nation currency. Group of 20 leaders begin their annual gathering in Los Cabos, Mexico, tomorrow, though France's Francois Hollande and Germany's Angela Merkel won't leave until after the outcome in Greece is known.
Exit Polls
Exit polls will be released when voting ends at 7 p.m. in Athens, with a first official estimate due around 9:30 p.m. The final polls, published on June 1, showed no party set to win a majority. The election marks a revote after the May 6 ballot failed to yield a government.
Tsipras and Samaras ran even in final opinion polls. The socialist Pasok party, which won the 2009 election and led the country into the bailout, was third at about 13 percent.
Now in its third year, the European debt crisis has rounded back to Greece, which sparked the turmoil in October 2009 when Pasok Prime Minister George Papandreou revealed a deficit four times more than European rules allowed. Greece has since gotten two rescue packages totaling 240 billion euros ($303 billion) from the European Union and International Monetary Fund.
The ballot will also mark the first test for a 100 billion- euro firewall for Spain, which on June 9 became the fourth euro country after Greece, Ireland and Portugal to seek a rescue.
Central banks intensified warnings that Europe's failure to tame its debt crisis threatens to roil the world's financial markets and economy as Greece's election looms as the next flashpoint for investors. European finance ministers plan to issue a statement at the G-20 summit.
'Black Cloud'
The Greek turmoil has cast a pall around the world, with Bank of England Governor Mervyn King calling the euro debt crisis a "black cloud" over the global economy.
The euro, created in 1999 and adopted by Greece in 2001, has lost 3.3 percent since May 6, when Syriza's second-place finish increased the prospect of a Greek exit from the currency union. New Democracy won 18.9 percent in the May 6 election and Syriza got 16.8 percent.
Tsipras has pledged to keep Greece in the euro even while scrapping state-asset sales, civil-service job cuts and wage and pension reductions. Samaras says Tsipras's policies risk forcing Greece out of the euro and causing hyperinflation, bank runs and widespread poverty.
Samaras said the choices facing Greeks at the ballot-box are government or instability; the euro or drachma. A vote for Syriza "means Greece out of the euro," he said.
Tsipras told Athenians June 14 that he was sending a message that nobody should bet on Greece leaving the euro area.
Challenging Merkel
New Democracy and Pasok "lowered the Greek flag and surrendered it to Angela Merkel," the German chancellor who led the demand for austerity, he said.
Standard & Poor's said in a June 4 report that the chance of Greece leaving the euro in coming months was one-in-three. Citigroup Inc. (C) said it maintained its 50 percent to 75 percent probability of a Greek exit over the next 18 months.
"The durability of any new Greek government will be limited due to implementation changes, continuing public opposition to austerity and vested interest opposition to structural reforms and privatization," Tina Fordham, senior global political analyst at Citigroup Inc. in London, said in a June 15 note.
New Democracy led Syriza by 22.7 percent to 22 percent, according to an ANT1 TV poll on June 1, the last date surveys were made public in accordance with Greek election law. Neither party has enough support to rule outright.
Third Round
Samaras said in his June 15 speech that the country couldn't survive a third round of elections and that he'd work to form a government to save the country with partners on two conditions: that Greece remain in the euro and that a new administration would renegotiate the terms of the bailout accords.
The spending reductions demanded by the troika of creditors from the EU, the European Central Bank and the IMF to bring the country back to financial health have included cuts to pensions and the minimum wage amid tax increases, sending unemployment to a record of more than 22 percent.
Worried Greeks have stepped up the pace of withdrawing their savings before the elections on concern the nation may move closer to abandoning the euro, bankers familiar with the situation said on June 13.
Bank Deposits
Deposit outflows jumped in the days following the May 6 election and were as much as 6 billion euros in May, Athens- based Kathimerini newspaper reported June 9, without saying where it got the information. Greek bank deposits by businesses and households rose to 166 billion euros in April from 165.4 billion euros the previous month, according to a statement by the Bank of Greece on its website on May 31.
The outflow is increasing the strain on a banking system that has suffered since the beginning of the crisis. An exit from the euro would cut lenders off from access to ECB funding.
Papandreou, speaking today in an interview with the BBC, said the situation is "stable if we stay in the euro," and warned of a "catastrophic" outcome if the nation were to abandon the single currency.
To contact the reporters on this story: Maria Petrakis in Athens at mpetrakis@bloomberg.net; Natalie Weeks in Athens at nweeks2@bloomberg.net
To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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Svizzera: contro Grexit controllo sui capitali in ingresso

Task force al lavoro: si studia un modo per disincentivare il flusso di capitali in ingresso in caso di Eurocrash

Se n’è parlato molto la settimana scorsa. Alcuni dirigenti dell’Unione Europea avevano invitato gli Stati a prepararsi all’ipotesi Grexit, ovvero all’eventuale uscita della Grecia dall’Euro.
Subito poi sono arrivate le smentite e i “cessate allarmi”. Ma in realtà si è voluto lanciare un sasso e poi togliere la mano, per mandare un messaggio che poi, chi voleva, recepiva ed utilizzava come preferiva.

Tra i tanti paesi molto attenti alle vicende Euro (e che non ne fa parte) cen’è uno che è interessatissimo a questa tematica, soprattutto perché è visto come l’alternativa all’Euro (valuta rifugio, paese rifugio) e sia perché eventuali shock sull’Eurozona potrebbero portare utleriore volatilità sui cambi, che vengono faticosamente tenuti sotto controllo.
Stiamo ovviamente parlando della Svizzera.
Infatti sembra proprio, da un articolo apparso sul WSJ che lo stato elvetico sia già pronto al Grexit, o comunque sia molto vicino alla costruzione di un firewall degno di nota, partendo proprio dal problema clou che si verrebbe a generare, ovvero il flusso di capitali in ingresso.

Si tratterebbe di una serie di controlli sui capitali in ingresso con una serie di disincentivi (visti già negli anni ’70) che andrebbero ad evitare una valanga di acquisti di CHF, con conseguente super rivalutazione della valuta e cross EUR-CHF che rischierebbe di saltare come una molla, oltrepassando quell’area 1.20 che la SNB sta continuando a difendere.

Immaginatevi la scena: se il cross EUR-CHF vola a 1:1, come la metterà la Svizzera con l’export? Diventerebbe dal punto di vista commerciale inavvicinabile, e l’economia elvetica andrebbe semplicemente in tilt.

Ovvio, al momento non abbiamo ancora dati certi. Però posso dirvi che c’è già una task force al lavoro per trovare la soluzione migliore.
La task force è guidata dal presidente della banca centrale svizzera Thomas Jordan, dal ministro delle Finanze Evelyne Widmer-Schlumpf più Anne Héritier Lachat, capo del servizi finanziari Finma settore regolatore.

“Dobbiamo essere preparati a qualsiasi evenienza, anche che l’UE cada a pezzi, anche se non mi aspetto che questo accada”, ha detto Jordan in un’intervista al settimanale svizzero Sonntagszeitung.
“La task force si concentra su misure che richiedono la cooperazione tra il governo e la banca centrale nella lotta contro la forza del franco svizzero”.

Tradotto significa un severo controllo sui capitali. Diciamo che questo è il minimo che dobbiamo aspettarci dalla Svizzera, e forse è anche la più facilmente fattibile come operazione a difesa di eventuale Grexit.
Credo che gli altri paesi, in particolar modo quelli membre dell’UE, avranno qualche problemino in più a creare un firewall credibile. Anche se secondo me resterà sempre inutile e mai realmente efficace.











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