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Jan 30, 2015
via Breakingviews

Greek deposits fly between a rock and a hard place

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By George Hay and Neil Unmack

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

The 25 members of the European Central Bank’s governing council must be experiencing unpleasant feelings of déjà vu. In 2012, they allowed bust banks in Cyprus to build up the equivalent of over half the tiny state’s GDP in so-called emergency liquidity assistance (ELA) from the island nation’s own central bank. That deferred Cyprus’ bail-in, but at a high cost. The eventual rescue and bail-in were more painful when they became unavoidable in 2013. It may be hard to avoid something similar in Greece.

Jan 30, 2015
via Breakingviews

Greek deposits fly between a rock and a hard place

Photo

By George Hay and Neil Unmack

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

The 25 members of the European Central Bank’s governing council must be experiencing unpleasant feelings of déjà vu. In 2012, they allowed bust banks in Cyprus to build up the equivalent of over half the tiny state’s GDP in so-called emergency liquidity assistance (ELA) from the island nation’s own central bank. That deferred Cyprus’ bail-in, but at a high cost. The eventual rescue and bail-in were more painful when they became unavoidable in 2013. It may be hard to avoid something similar in Greece.

Jan 28, 2015
via Breakingviews

Mortgage freeze could hasten Greek bank reform

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By George Hay and Neil Unmack

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Before asking euro zone creditors to reduce Greece’s public debt, Prime Minister Alexis Tsipras might consider making good on another pledge: a permanent mortgage moratorium. Inflicting pain on the likes of National Bank of Greece, Alpha Bank, Piraeus or Eurobank looks easier and faster than negotiating the country’s bailout terms. Less intuitively, it could also help Tsipras’ Syriza movement trigger a healthy restructuring of the country’s lenders.

Jan 26, 2015
via Breakingviews

Greek banks will have to live hand to mouth

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By George Hay

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Greek banks have had a hell of a year. In January 2014, the sector’s shares were trading at almost double where they are now, buoyed by inflows of foreign capital. Holders of National Bank of Greece, Piraeus, Eurobank and Alpha Bank could anticipate a future of decreasing government stakes and healthy credit growth. Following the election of the anti-austerity party Syriza, everything is now on ice.

Dec 16, 2014
via Breakingviews

EU insurers’ solvency is shakier than it looks

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By George Hay

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The capital strength of European insurers is shakier than it looks. Recent stress tests by the European Insurance and Occupational Pensions Authority found that only 14 percent of insurers fell below a baseline level of capital strength under so-called “Solvency II” reforms. That’s not the end of the story, however.

Dec 11, 2014

Breakingviews: Carney the showman risks stage-managed policy

By George Hay

LONDON (Reuters Breakingviews) – Mark Carney’s transparency
drive is a double-edged sword. The Bank of England governor has
unveiled a series of reforms that should move the UK central
bank some way from its historic position, reputedly summed up by
a former governor as “never explain, never excuse.” The snag is
that effective central banking can benefit from a degree of
secrecy and opacity.

The radical shift is to publish full transcripts of a big
chunk of the monthly meeting of the Monetary Policy Committee,
which sets interest rates. The release of this material will
have an eight-year lag. That is still a short enough delay to
make participants utter every word with the external audience in
mind, rather than letting the internal debate rage. Meanwhile,
tidy minutes of the proceedings will be published as soon as the
decision on moving or holding rates is announced.

Nov 24, 2014
via Breakingviews

Boris should pay up but not shut up over U.S. tax

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By George Hay

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Boris Johnson has a point about his U.S. tax bill, but he should still cough up. The London mayor objects to the fact that his dual UK and U.S. citizenship means he has been issued with an American tax bill, and he says he won’t pay. Though many U.S. expats will share his frustration, it does not warrant civil disobedience.

Nov 19, 2014
via Breakingviews

Deutsche’s CoCo buyers are not totally irrational

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By George Hay

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

There’s method in the madness of those investing in Deutsche Bank CoCos. The German lender confirmed on Nov. 19 that it had sold $1.5 billion of so-called contingent convertible debt with a 10-year maturity, following the May sale of 3.5 billion euros of six-year paper. Buying bank debt that is written down when the share price is tumbling sounds crazy, but it might not be right now.

Nov 12, 2014
via Breakingviews

Barclays’ forex delay looks like bad news

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By George Hay

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Barclays is once again exposed. In June 2012, the UK bank was the first to settle claims that its staff attempted to fiddle Libor rates. It promptly lost its senior management and a good deal of its reputation. A decision this time round to hang back from an industry settlement for multiple failings in foreign exchange trading is harder to immediately assess. But it probably isn’t good news.

Nov 10, 2014
via Breakingviews

Global banks prepare for un-level playing field

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By George Hay

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

No bank should be too big to fail. The world has taken a step closer to that admirable goal with the Nov. 10 capital proposals from the Financial Stability Board, the body responsible for global coordination of bank regulation. But the latest plan has too many national carve-outs to do much for the FSB’s other aim of establishing a “level playing field.”

    • About George

      "George Hay coordinates European financial coverage and writes about macroeconomics, the euro zone and UK/European financial policy. He covered European banks for Breakingviews during the financial crisis, and has also worked as a correspondent for AFX News and at United Business Media. He attended Edinburgh University and his work has been recognised at the UK’s Business Journalist of the Year Awards. Follow George on Twitter @gfhay"
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