"Otóż
EBC sprawdza, co kryje się w aktywach największych banków strefy euro i czy
przypadkiem nie dochodzi w nich do zaniżania wag ryzyka a przez to zawyżania
współczynników wypłacalności i fałszowania obrazu kondycji całego sektora
bankowego w Europie. Bankom zależy na tym, aby na papierze ryzyko przez nie
podejmowane było jak najmniejsze, z uwagi na wymogi kapitałowe stawiane im
przez regulacje Basel III/CRR/CRD IV. Zasada generalna jest następująca: im
bardziej ryzykowne aktywa są w bilansie banku, tym więcej kapitału własnego
dany bank powinien posiadać, aby zamortyzować ewentualny default ferelnego
aktywa."
Pokazywanie postów oznaczonych etykietą EBC. Pokaż wszystkie posty
Pokazywanie postów oznaczonych etykietą EBC. Pokaż wszystkie posty
Don't pin all your hopes on SME asset-backed securities
"So
the idea must be that the presence of the ECB in the SME ABS market would spur
loan issuance. To make a significant difference to credit conditions in the
periphery and repair the broken monetary policy transmission mechanism, that
loan issuance would have to be simply huge and concentrated in periphery
countries. There are several problems with this, to my mind.
Firstly,it
makes a huge assumption about the scale of potential demand for credit in the
periphery from creditworthy SMEs. Is discouraged demand really that huge - or
is there actually a problem with the creditworthiness of potential borrowers,
because of the widespread destruction of physical and human capital in the
periphery? Distressed corporate loans in the periphery are far higher than in the core. That's
why spreads are so high. Why would an SME ABS programme
improve the creditworthiness of borrowers?"
Draghi's Jackson Hole speech has been misunderstood
"Mario Draghi's speech at Jackson Hole on August 22nd caused a considerable stir. For the first
time, he admitted that the absence of a central bank backstop for government
borrowing means both higher borrowing costs for governments and a greater
likelihood of market punishment for profligate governments (...)."
"And the consequences of
this shocking waste of human capital could be serious. Highly-indebted
governments in the Eurozone depend on high tax revenues in the future to reduce
their debt burdens: while even less heavily indebted governments such as
Germany will also need high tax revenues in the future to support their increasing
proportion of elderly. The future fiscal sustainability of the Eurozone depends
on the young people whose futures are currently being systematically destroyed
by unemployment. THIS is what Draghi's speech is about."
Why Negative Rates Won't Work In The Eurozone
"It seems unlikely that the ECB is unaware of the effect of
negative rates on Danish lending volumes. So despite
extensive comments in the media about negative rates encouraging banks to lend,
I doubt if that is the real purpose. Indeed, as M3 lending
figures for the Eurozone actually improved slightly in April, it is hard to see why the ECB
would act now when it did not earlier this year.
So I don’t
think this is about bank lending at all. I think it is about German disinflation and the exchange value of the
Euro."
How the Greek Banks Secured an Additional, Hidden €41 billion Bailout from European taxpayers
"In 2013 Greek taxpayers borrowed from the
rest of Europe’s taxpayers €41 billion to pump into the Greek banks. This is well known. What is not known is that, also in 2013/4, the Greek banks received an
additional, well hidden, €41 billion bailout loan from Greek and European
citizens. This bailout was never authorised
by any Parliament or even discussed in public anywhere in Europe.
This is how it worked: Bank X would lend money to… itself. It would do this by issuing
a bond which it did not intend to sell. So, why issue such a phantom
bond? Why write an IOU and give it to one’s self? The answer is: In order to
hand this phantom bond over to the European Central Bank as collateral in
exchange for a cash loan. Normally, of course, the ECB would never
accept such a phantom bond as collateral. Accepting it would have
been to accept a loan it gave to Bank X as collateral for the said loan. It
would have been an assault on the meaning of collateral and a gross violation of
the ECB’s rulebook. So, bank X, knowing this, took its phantom bond
first to the Greek government and had it guarantee it. With the government’s
guarantee stamped on it, the ECB then accepted Bank X’s phantom bond and handed
over the cash. Why? Because the Greek taxpayer had, in the meantime, unknowingly provided
the collateral for Bank X’s loan."
PONZI AUSTERITY: A definition and an example
"Ponzi
austerity is the inverse of Ponzi growth. Whereas in standard Ponzi (growth)
schemes the lure is the promise of a growing fund, in the case of Ponzi
austerity the attraction to bankrupted participants is the promise of reducing
their debt, so as to liberate them from insolvency, through a combination of
‘belt tightening’, austerity measures and new loans that provide the bankrupt
with necessary funds for repaying maturing debts (e.g. bonds). As it is
impossible to escape insolvency in this manner, Ponzi austerity schemes, just
like Ponzi growth schemes, necessitate a constant influx of new capital to
support the illusion that bankruptcy has been averted. But to attract this
capital, the Ponzi austerity’s operators must do their utmost to maintain the
façade of genuine debt reduction."
Looking back on the Global, European and Greek (post-2008) crises
"How did the EU profit
from Greek indebtedness all these years?
The implicit contract between Greece and the European Common Market, as the European Union was called back in 1980, was simple: Greece would open up its borders to northern European imports and Northern Europe would transfer surpluses to Greece. The hope was that, in the process, investment funds would also flow into Greece to support local industries thus “balancing” out Greece’s trade and capital flows vis-à-vis Europe. However, the reality was that the funds that flowed in simply inflated asset prices while, catastrophically, they came hand-in-hand with the collapse of Greek industrial facilities which were quickly purchased by northern European companies, closed down, and turned into warehouses for their imports (e.g. the white goods industry that was purchased by Siemens which then used “badge engineering” tactics to sell imported refrigerators in Greece, under Greek labels). When in the 1990s the Eurozone was being concocted, and interest rates collapsed Euroland-wide, the process sped up massively and Greece’s hitherto risk averse and debt-hating households began to borrow more, purchasing German and other northern European goods as if there was no tomorrow; funded by the flow of northern European cash that was actively seeking higher returns in the European Periphery, often resorting to predatory lending of households and governments alike."
The implicit contract between Greece and the European Common Market, as the European Union was called back in 1980, was simple: Greece would open up its borders to northern European imports and Northern Europe would transfer surpluses to Greece. The hope was that, in the process, investment funds would also flow into Greece to support local industries thus “balancing” out Greece’s trade and capital flows vis-à-vis Europe. However, the reality was that the funds that flowed in simply inflated asset prices while, catastrophically, they came hand-in-hand with the collapse of Greek industrial facilities which were quickly purchased by northern European companies, closed down, and turned into warehouses for their imports (e.g. the white goods industry that was purchased by Siemens which then used “badge engineering” tactics to sell imported refrigerators in Greece, under Greek labels). When in the 1990s the Eurozone was being concocted, and interest rates collapsed Euroland-wide, the process sped up massively and Greece’s hitherto risk averse and debt-hating households began to borrow more, purchasing German and other northern European goods as if there was no tomorrow; funded by the flow of northern European cash that was actively seeking higher returns in the European Periphery, often resorting to predatory lending of households and governments alike."
The Death of Direct Bank Re-capitalisation: Europe’s (newest) day of shame
Mr Olli Rehn, the EU’s
economic overlord, has said it himself, in describing this scheme as an attempt
not to decouple the two crises but, rather, to “dilute the link” between them.
It is like telling a hanging man that you will not cut the rope choking him but
that you will remove a couple of layers of string from it."
Monetising the… ECB: The latest insult to be added to Greece’s multiplying injuries
"Last week another
installment of the cruel theatre of the absurd, also known as the ‘Greek
Rescue’ (and more recently re-released as ‘Greece’s success story’), was
delivered silently: Not for the first time, the bankrupt Greek state borrowed
from one arm of the Eurozone to give to another, with massive interest to boot.
To be precise, the Greek government borrowed €4.2 billion from the European
Stability Mechanism (ESM) in order to repay the… European Central Bank (ECB)
€5.6 billion, leaving the ECB with a profit of €2 billion plus from this
hideous transaction. Re-pay what exactly?"
EBC Working Paper NO 1424 - THE PITCH RATHER THAN THE PIT
Czym w wolnych chwilach od
"ratowania" Grecji zajmują się w EBC.
"At the 2010 FIFA World
Cup in South Africa, many soccer matches were played during stock market trading
hours, providing us with a natural experiment to analyze fluctuations in investor
attention. Using minute‐by‐minute trading data for fifteen international stock exchanges,
we present three key findings. First, when the national team was playing, the
number of trades dropped by 45%, while volumes were 55% lower. Second, market activity
was influenced by match events. For instance, a goal caused an additional
drop in trading activity by 5%. The magnitude of this reduction resembles
what is observed during lunchtime, and as such might not be indicative for
shifts in attention."
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