It was reported that European banks took out EUR489 billion worth of cheap loan from a facility provided by the European Central Bank. The Wall Street Journal revealed these banks will require more than EUR700 billion to meet their obligation next year, with more than EUR200 billion debt maturing in the first quarter of 2012 […]

More on CDS and the European crisis. U.S. banks increased sales of insurance against credit losses to holders of Greek, Portuguese, Irish, Spanish and Italian debt in the first half of 2011, boosting the risk of payouts in the event of defaults. Guarantees provided by U.S. lenders on government, bank and corporate debt in those […]

[2443] Guess who?

Nope ladies and gentlemen. It is not Germany. Despite voter backlash and political discontent, Germany went ahead. What is EUR211 billion among friends? Nay. It is not the Netherlands. The Dutch were vocal but voted for it anyway. What is another EUR44 billion? No, it is not Finland. For all the demand for collateral, Finnish […]

[2409] Yet another day to panic

It was earlier this week when CNBC (or was it Bloomberg?), several economics and finance commentators were highlighting the supposedly inconsistency of S&P’s downgrade of US debts. They showed that several other European countries had higher probabilities of defaulting their obligations than the US, yet these European ratings were higher than that of the US. […]

Almost 30 years ago, the European Exchange Rate Mechanism (ERM) was established to promote monetary stability among 12 members of the European Commission (EC). All participating states agreed to limit the variability of respective currency to 2.25% band on either side of a central rate. Later members were allowed to have their exchange rate to […]