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Statement by the IMF on the European Banks Stress Test
July 15, 2011--Mr. José Viñals, financial counselor and director of the Monetary and Capital Markets Department of the International Monetary Fund (IMF), issued the following statement today:
“The Fund welcomes the EU-wide stress test exercise carried out under the auspices of the European Bank Authority (EBA) and the strengthened methodology and assumptions that have been applied across the banks in the exercise.
“The disclosure of the very detailed information accompanying the release of the stress test results will allow market participants to form a considered view of the soundness of the banks participating in the test. We hope that this elevated degree of transparency becomes a permanent feature at the level of national jurisdictions.
“The outcome of the exercise reflects efforts made by individual institutions and national supervisory authorities to strengthen bank balance sheets, but more needs to be done. The Fund considers it important that national authorities have promptly committed to address the pockets of vulnerability detected through the stress test exercise, and strongly advocates that the necessary measures are taken to effectively address weaknesses not only in institutions that have ‘failed’ the test, but also in those that have only narrowly passed it. More generally, in light of the current turmoil, the Fund would emphasize the importance of further strengthening capital buffers.”
Source: IMF
Shareholders of Deutsche Börse AG approve the combination with NYSE Euronext – 82.43 percent of the shares in Deutsche Börse have been tendered to be exchanged into shares of the new holding "Alpha Beta Netherlands Holding"
July 15, 2011--Deutsche Börse AG has announced today that its shareholders have approved the planned combination with NYSE Euronext. According to the final score, 160.734.462 shares in Deutsche Börse have been tendered to be exchanged into shares of Alpha Beta Netherlands Holding N.V., the future common holding company of Deutsche Börse and NYSE Euronext.
The resulting final acceptance ratio of 82.43 percent exceeds the minimum acceptance ratio of 75% (condition precedent pursuant to section 14.1 (a) of the offer document published on 4 May 2011). Deutsche Börse and NYSE Euronext have thus cleared another important hurdle on their way to combining the businesses.
Deutsche Börse CEO Reto Francioni: "We are pleased that such a large majority of our shareholders has not only enabled the planned combination between Deutsche Börse and NYSE Euronext by tendering shares but has also confirmed our mandate to implement the related strategic targets. This is a historic day. We have made an important step forward on our way towards successfully combining Deutsche Börse and NYSE Euronext into the world's premier stock exchange operator. The decision is testimony to our shareholders' belief in the growth prospects and the upside potential of the proposed global leader among stock exchange operators. We also view it as a vote of confidence and we will work very hard to meet our shareholders' expectations."
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Source: Deutsche Börse
LME rule disappoints aluminium consumers
July 15, 2011--Some of the world’s largest buyers of aluminium reacted with disappointment on Friday to a long-awaited decision by the London Metal Exchange to change its warehousing rules.
General Motors, one of the world’s largest automakers, and Novelis, a leading aluminium processor, told the Financial Times that the LME’s move to double the rate at which the largest warehouses must deliver metal did not go far enough.
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Source: FT.com
Euro stabilises after slide on contagion fear
May 15, 2011--The euro hit a four-month low against the dollar and a record trough against the Swiss franc this week as Italy and Spain were increasingly sucked into the eurozone’s debt crisis.
The single currency suffered on fears that the debt problems of relatively small countries on the periphery of the region were spreading to larger economies.
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Source: FT.com
IMF assesses financial stability in Sweden
July 14, 2011--At the invitation of the Ministry of Finance and the Riksbank, the International Monetary Fund (IMF) will visit Sweden to make a structured examination of the financial sector, what is known as an FSAP (Financial Sector Assessment Program).
This assessment will entail the IMF analysing the financial sector, the public authorities, legislation and financial supervision in Sweden. The IMF will also include in its report any shortcomings and risks that are detected and propose measures for dealing with them.
The IMF has carried out FSAPs in almost all member countries since 1999 and they have also made a second assessment for a number of countries. Sweden had its first FSAP during 2001/2002.
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Source: Finansinspektionen
European groups fear OTC derivatives plan
July 14, 2011--Europe’s largest industrial companies have expressed alarm at a proposal by the European Commission
that they say would impose punitive capital charges on banks providing over-the-counter derivatives to companies, stifling legitimate hedging.
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Source: FT.com
France loses out in ‘flight to quality’
July 14, 2011--Could France be losing its haven status in Europe’s sovereign debt markets? This week the difference between French and German borrowing costs rose to its highest since 1997, raising concerns over whether France could become the next victim of the current crisis of confidence in European debt markets.
The so-called spread to German Bunds hit 77 basis points on Wednesday, marking a sharp break with the past close correlation between continental Europe’s two biggest economies of 30-40 basis points.
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Source: FT.com
Euro area annual inflation stable at 2.7%
EU down to 3.1%
July 14, 2011--Euro area1 annual inflation was 2.7% in June 20112, unchanged compared to May. A year earlier the rate was 1.5%. Monthly inflation was 0.0% in June 2011.
EU3 annual inflation was 3.1% in June 2011, down from 3.2% in May. A year earlier the rate was 1.9%. Monthly inflation was -0.1% in June 2011.
These figures come from Eurostat, the statistical office of the European Union.
Inflation in the EU Member States In June 2011, the lowest annual rates were observed in Sweden (1.5%), Slovenia (1.6%) and the Czech Republic (1.9%), and the highest in Romania (8.0%), Estonia (4.9%) and Lithuania (4.8%). Compared with May 2011, annual inflation fell in fourteen Member States, remained stable in six and rose in six.
The lowest 12-month averages4 up to June 2011 were registered in Sweden (1.5%), the Czech Republic and the Netherlands (both 1.8%), and the highest in Romania (7.8%), Estonia (4.7%) and Greece (4.6%).
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Source: AME Info
BlackRock ETF Landscape: STOXX Europe 600 Sector ETF Net Flows -Week Ending 08-Jul-2011
July 13, 2011--For the week ending 08 July 2011, there were US$85.7 Mn net inflows to STOXX Europe 600 sector ETFs. The largest sector ETF net inflows last week were in basic resources with US$74.7 Mn followed by food and beverage with US$40.1 Mn net inflows while banks experienced net outflows of
US$42.7 Mn.
Year to date, STOXX Europe 600 sector ETFs have seen US$87.5 Mn net outflows. Insurance has seen the largest net outflows with US$191.5 Mn, followed by utilities with US$181.4 Mn net outflows, while banks experienced the largest net inflows with US$260.8 Mn.
As of 08 July 2011, there is US$9.9 Bn AUM invested in the STOXX sector ETFs which is greater than the US$5.9 Bn open interest in the sector futures. The ETF AUM is greater than the open interest in the corresponding futures contract in 17 out of 19 sectors.
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Source: Global ETF Research & Implementation Strategy Team, BlackRock
Sweden: Financial Sector Stability Assessment
July 13, 2011--EXECUTIVE SUMMARY, KEY FINDINGS, AND RECOMMENDATIONS
The Swedish economy has rebounded strongly. The impact of the financial crisis on Sweden’s economy and financial sector was substantial, resulting in a sharp output contraction, currency depreciation, and major banks faced liquidity strains, which, coupled with concerns about asset quality in banks’ operations in the Baltics, have lead to sharp
decline in banks’ share prices.
The authorities’ response was forceful, introducing a wide range of extraordinary measures that helped to contain the impact of the crisis, and restore market stability and confidence. Economic indicators improved markedly in 2010, and banks’
capital position and profitability strengthened, allowing the exit from crisis-response measures to begin in April 2010.
Financial stability analysis indicates that banks are resilient to credit risk, but could face difficulties with respect to liquidity risks. The stress testing results show that banks should be able to maintain adequate capital in the face of severe credit risk shocks, owing to high profits and capital buffers, and relatively high-quality loan portfolios. Liquidity stress tests suggest vulnerabilities due to the banks heavy reliance on short-term wholesale funding. The authorities’ intention to accelerate the implementation pace of Basel III capital requirement, impose higher than minimum capital requirements on the largest and systemically important banks, and tighten liquidity regulations are welcome steps, given the nature of banks’ exposures and prevailing risks.
view the Sweden: Financial Sector Stability Assessment
Source: IMF
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