non-performing loans

European Banks Soar As Draghi Hints At "Public Backstops"

If ever there was a reason for more European nations to 'exit' the sinking ship, Mario Draghi just spewed one. Having sent European bank stocks sliding with earlier calls for reforms, Draghi's wishful-thinking sent bank stocks soaring (especially Italian banks) after he noted a "public backstop is a measure that would be very useful and should be agreed with the Commission according to the existing rules." We can only imagine Herr Schauble's face when he heard this... and what about the Dijsselblom "template"?

"Janet Yellen Sounds Like A Fumbling Idiot No Matter What She Does"

"No matter what Alan Greenspan did he was taken as a genius. Whereas 20 years later, Janet Yellen sounds like a fumbling idiot no matter what she does. All her actions come across as desperate because the credibility has been blown away. The Fed has been forced into action and by being forced into action it has only highlighted what the Fed can’t do."

Could Italy Bring Down The Euro?

"A perfect storm of slow or zero Italian economic growth, low interest rates and politically connected, often corrupt, lending have combined to create a situation where the Italian financial system is in need of a large rescue."

Eurogroup Head Dashes Italy Bank Bailout Hopes: "I Will Resist Taxpayer Bailouts Very Strongly"

Jeroen Dijsselbloem poured cold water on Italy's ongoing attempts to force a bank bailout when he said earlier today that not only was he not "particularly" worried about italian banks but that “there have always been and will always be bankers that say ’we need more public money to recapitalize our banks.... and I will resist that very strongly because it is, again and again, hitting on the taxpayer." He then added that "the problems with the banks need to be sorted out in the banks and by banks.”

A Look Inside Europe's Next Crisis: Why Everyone Is Finally Panicking About Italian Banks

Back in May 2013, we wrote an article titled "Europe's EUR 500 Billion Ticking NPL Time Bomb" in which we laid out the biggest danger facing European banks: non-performing loans. As of this moment, that time bomb may have finally gone off: as the WSJ writes overnight, the Brexit damage to the rest of Europe "could be more immediate and potentially more serious. Nowhere is the risk concentrated more heavily than in the Italian banking sector." Indeed, "Brexit could lead to a full-blown banking crisis in Italy." Here's why.

Brexit & The Crisis Of Capitalism

Thousands of commentaries have been issued about Brexit in the past week. Most discuss Brexit as the result of immigration issues, class war, political theater, a reaction against the European Union's bureaucratic power, sovereignty, etc. Other essays focus on the potential upsides or downsides of Brexit. What few if any commentators present is the idea that Brexit is a symptom of the Crisis of Capitalism...

Price Discovery - R.I.P.!

But the destruction of price discovery in the sovereign debt market is not simply an academic curiosity to be jawed about by the few remaining fiscal scolds in the world. To the contrary, it is already having massive toxic consequences in the arenas of fiscal governance and capital markets alike.

Italy Just Bailed Out Another Failed Bank, May Use Pension Funds For Future Bank Rescues

Overnight, yet another failed Italian bank was bailed out. As the FT reports overnight, Atlante, Italy's privately backed €5bn bank bailout fund which was created in April to stem the threat of contagion from struggling lenders and whose assets turned out to be woefully inadequate, took control of Veneto Banca after a €1bn capital increase demanded by EU bank regulators attracted zero interest.

Germany Just Blew Up Italy's Bank Bailout Plan

Germany opposes any attempt to shield private bank investors from losses if Italy pushes ahead with plans to recapitalize lenders. Merkel’s government says that European Union rules on handling struggling banks should apply in any rescue effort, including forcing losses on shareholders and some creditors before public money can be injected. The government in Berlin rejects the argument that the U.K. vote to leave the EU constitutes an “exceptional circumstance.”