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Analysts talk of bank 'whitewash' but see no 'skeletons'
July 23, 2010-- Banking regulators published "stress tests" on 91 European banks accounting for 65 percent of EU banking on Friday, finding that seven failed and must raise extra capital to survive a new crisis.
A crucial question for the financial sector is the rigour, and therefore credibility, of the way the crash criteria were set for the banks. Here are some comments from financial analysts.
VTB Capital economist Neil MacKinnon:
"In the end, the stress tests do not seem that stressful.
"It looks like a whitewash and the initial reaction is one of scepticism on the part of the markets."
Mark O'Sullivan, director of dealing at foreign exchange firm Currencies Direct:
"What seems to have occurred is a compromise amongst European banking regulators, with many questioning if the bar had been set way too low in testing the European banking sector.
"It seems the tests may have raised more questions than they have answered and in the coming weeks it will be the interbank lending markets that will have the real answer as to whether real confidence has returned to the European banks."
Ireland showing best funds growth
July 22, 2010--IRELAND IS the fastest-growing of the major European fund centres, and is now attracting hedge funds away from traditional offshore locations, according to the inaugural Ireland Funds Report.
Ireland’s fund industry has fully recovered from declines suffered during the credit crunch, it says. The report, which is published by Finance Dublin, notes that the total assets of Irish-domiciled funds stood at €856 billion by the end of May, after dipping to €647 billion in 2008.
This recovery can be partly attributed to global growth trends. In the first quarter of the year, all major fund centres in Europe experienced asset growth, except for Italy and Spain.
Istanbul Stock Exchange hits all-time record exceeding 60,000 Spain sets up repository for OTC derivatives The first phase will focus on interest rate derivatives, before broadening later this year to include underlying assets such as equities, currencies, commodities and debt. European banks on edge over stress test exam
But they have also made clear that any banks failing the tests will be ring-fenced with official support.
Credit rating agency Fitch said it thought that "capital will be made available by governments where the stress tests ... indicate shortfalls and banks are unable to raise capital in the public markets."
Italian banks have passed stress tests: report
The Bank of Italy declined to comment on the report.
Banks in the 16-nation eurozone and in Britain, Denmark, Hungary, Poland and Sweden have been checked to see if they have sufficient capital to withstand shocks such as those which caused the collapse of US investment giant Lehman Brothers in 2008. Credit Suisse outsources German fund admin to SocGen Source fastest growing ETP provider in Q2 2010
The MSCI Emerging Markets Source ETF had the highest inflows of all European ETPs, with the Dow Jones Euro Stoxx 50 Source ETF in third place.
Euro Area: Restoring Confidence Key to Growth
Strong action by members of the European Union to establish a European Stabilization Mechanism to help countries in difficulty has helped calm markets, as has austerity plans announced by a number of countries, including Greece, Ireland, Spain, and Portugal. The European Central Bank (ECB) has also proved to be an anchor of stability throughout the crisis. Following much debate, the results of bank stress tests conducted on a large set of banks in the 27-member European Union will now be published on July 23. Successful tests should allay market concerns about the health of major European banks, and boost confidence in the euro area. ETF Landscape: STOXX Europe 600 Sector ETF Net Flows, week ending 16-Jul-10
The assets invested in the ETFs are greater than the open interest in the corresponding futures contract in 18 out of 19 sectors.
July 22, 2010--The ?stanbul Stock Exchange (?MKB) broke new records over the past two days, exceeding 60,000 for the first time in its history in the first session of trading yesterday.
The ?MKB-100 benchmark index on Wednesday registered a closing record of 59,494 points, a 2.18 percent gain over the previous day. The highest closing value the index had ever reached before Wednesday was 59,330, on April 12. The index started off the day yesterday with a drop of 191 points, or 0.32 percent, to 59,303 but quickly started to rise again.
July 22, 2010--Spain on Thursday launched a trade repository for over-the-counter derivatives in the first step of a pan-European project to create a reporting system for financial products currently traded off-market.
Bolsas y Mercados Españoles (BME), the Spanish stock market operator, said the repository – called REGIS-TR – had begun a pilot phase after internal testing. BBVA and Banco Sabadell, the Spanish lenders, had signed up to the initial trial period, it said, and other European institutions were expected to join the test “in the near future”.
July 22, 2010-- Powerbrokers in European finance expect a few black marks when results of tests on the capacity of European banks to survive new shocks are released on Friday but also count on governments to help the weaklings.
Ministers and top eurozone officials have insisted that overall, the European banking system will pass these critical "stress tests."
July 22, 2010-- Financial "stress tests" on the five Italian banks that underwent them have shown core capital reserves well above what is needed to resist a severe shock, daily Il Messaggero reported on Thursday.
The two largest banks, Unicredit and Intesa Sanpaolo, came out on top with a Core Tier One ratio -- of a bank's core equity capital to its total assets -- of about 8 percent, Il Messaggero reported.
Banca Monte dei Paschi di Siena, Banco Popolare and Ubi Banca also showed positive results, the paper said.
July 22, 2010--Societe Generale Securities Services (SGSS) and Credit Suisse (Deutschland) AG have signed an agreement on a partnership under the terms of which SGSS will provide Credit Suisse Asset Management in Germany with comprehensive fundadministration services.
Credit Suisse Asset Management in Germany has decided to outsource its fund administration business to SGSS as a dedicated partner which will provide a broad range of administrative and technological solutions to Credit Suisse (Deutschland) AG, including front-office services (ASP), funds administration and reporting services.
July 22, 2010--Source saw higher net cashflows than any other European exchange-traded product provider in the second quarter of 2010, according to a recent report by Deutsche Bank.
Source was dominant in the equity segment of the market, accounting for 63 per cent of net cashflow.
IMF Survey online
July 21, 2010
Credible bank stress tests essential to restore confidence
Action needed to establish fiscal sustainability and restore growth
Wake-up call to strengthen area-wide economic governance
Before the euro area economy could recover firmly from the global crisis, it was hit by market concerns related to the sovereign debt of some of its members.
The turmoil has clouded the prospect of a strong regional and global recovery, with the IMF now projecting average growth of just 1 percent for 2010, rising to 1¼ percent in 2011.
July 21, 2010--Last week saw US$263.9 Mn net outflows from STOXX Europe 600 sector ETFs. The largest sector ETF outflows last week were in Basic Resources with US$179.5 Mn and Media with US$49.6 Mn while Banks experienced net inflows of US$46.1 Mn.
Year-to-date, STOXX Europe 600 sector ETFs have seen US$684.5 Mn net outflows. Telecommunications sector ETFs have seen the largest net outflows with US$224.1 Mn, followed by Basic Resources with US$176.8 Mn while Media has experienced the largest net inflows with US$212.7 Mn net new assets YTD.
