ECB has bright idea for targeted bank-bashing

November 26, 2015

Imposing a staggered penalty on banks that hoard cash is one of many ways to ease policy being discussed by the European Central Bank. Such levies have drawbacks. But at least a split-level charge would encourage the biggest hoarders to boost cross-border lending.

Portugal’s ropey bank rescue comes home to roost

November 16, 2015

The “good bank” part of bust lender BES needs another 1.4 bln euros, EU regulators say. If it ends up being sold cheaply, fellow banks that part-financed its rescue could suffer. Had Lisbon taken a tougher line with senior creditors last year, it would be in less of a mess.

ECB hits European banks where it doesn’t hurt

November 11, 2015

Europe’s banking supervisor wants to fast-track the phasing out of bogus capital like deferred tax assets. Greater harmonisation is exactly what Frankfurt should be pushing. But the ECB’s inability to tell national governments what to do will limit the fallout for most lenders.

Hefty ECB rate cut might do more harm than good

November 10, 2015

Some European Central Bank policymakers want to push the floor for policy rates deeper into negative territory. This may depress the euro and bond yields for a while. But Nordic evidence of the price banks pay when rates are so low suggests an outsized cut may be self-defeating.

Greek banks get marginally more investable

November 2, 2015

ECB stress tests revealed a 14 bln euro capital hole. The tests were doubly tough: the pass mark was high, and the state will not prevent shareholder dilution. Yet banks are stuck with bad loans and the economic outlook is unclear. Greek bank equity is still a bet for the brave.

Dixon: Tsipras’ biggest stress tests yet to come

By Hugo Dixon
November 2, 2015

A central bank verdict that the top Greek lenders must raise only 14.4 billion euros is welcome news for the prime minister. But he has to implement more tough measures before he can secure debt relief from his euro zone creditors. Until then, he faces political risks.

Hugo Dixon: Greek bank recap is race against time

By Hugo Dixon
October 5, 2015

Capital must be injected by year-end to avoid a disastrous bail-in of uninsured depositors. To meet the deadline, Europe’s central bank must finish its stress test and decide how much capital is required. The banks then need time to see if private investors will take part.

Hugo Dixon: It’s all up to Tsipras now

By Hugo Dixon
September 21, 2015

The leftist politician’s electoral triumph means domestic forces can’t impede him in implementing Greece’s 86 billion euro bailout deal. The big question is whether Alexis Tsipras has the will and the competence to do so. If not, his victory could soon turn to disaster.

Hugo Dixon: Greek election may reopen can of worms

By Hugo Dixon
August 31, 2015

Given that no party is likely to emerge from next month’s vote with a majority, it may be hard to form a strong government that can implement the country’s new bailout deal. There’s even a risk that there will be yet more elections. That could tip Greece back into crisis.

Hugo Dixon: Greece may not need debt haircut

By Hugo Dixon
August 17, 2015

No single measure, such as debt to GDP, adequately captures how unsustainable Athens’ balance sheet is. Most other yardsticks show Greece needs debt relief. But cutting the face value of its borrowings is probably not required.