The Great Debate UK
Fortis shareholders retreat with honour
– Margaret Doyle is a Reuters columnist. The opinions expressed are her own –
Revolting shareholders were reduced to throwing shoes and coins at the chairman at Tuesday’s meeting to approve the carve-up of the failed Benelux bancassurer, but to no avail.
It looked like throwing good money after bad.
A majority of shareholders still backed the deal, rightly recognising that it represented the best hope for their beaten-down shares. By going to the law over the nationalisation of the Benelux banks and the sale of the Belgian bank to BNP Paribas <BNPP.PA> last October, the shareholders won some baubles for the rump Fortis Holding company <FOR.BR>.
It held onto the Belgian insurer as well as a ragbag of foreign insurers. The group’s exposure to Fortis’s old structured credit portfolio was also reduced, and its cash increased, from 1.3 billion euros to 3.4 billion euros.
Germany’s bad bank fudge
– Margaret Doyle and Paul Taylor are Reuters columnists. The opinions expressed are their own –
LONDON/PARIS, April 23 (Reuters) – Germany is to set up a system of bad banks before the summer recess to hold some 250 billion euros of toxic assets. Finance Minister Peer Steinbruek has assured taxpayers that his solution — called “eine Bad Bank” (there is no German word for the concept) — will not weigh on the budget.
from The Great Debate:
Goldman’s TARP out: give up ALL state aid
-- Jonathan Ford is a Reuters columnist. The views expressed are his own --
Goldman Sachs wants to do its duty by the American people and give them their TARP money back. Some spoilsports have urged the government simply to say no because allowing the investment bank to repay the cash would make other banks look bad.
But this seems rather un-American. Why shouldn't taxpayers get their money back if Goldman really doesn't need it? The point to insist upon is that they get all of it back -- and on commercial terms.
from The Great Debate:
Geithner’s naked subsidy redefines toxic
-- James Saft is a Reuters columnist. The opinions expressed are his own
Treasury Secretary Geithner is all but admitting that U.S. banks are suffering not from market failure but self-inflicted collateral damage.
The U.S. Treasury on Monday detailed an up to $1 trillion plan to buy up assets from banks in partnership with private investors, using financing bankrolled by the government, financing that is only secured by the value of the doubtful assets the fund buys.
from UK News:
Late payments send small businesses to the wall
By clamping down on credit, Britain's newly cautious banks are making collapse almost inevitable for many small to medium enterprise (SMEs) who need a financial cushion now, more than ever, as suppliers and customers struggle to pay bills as the economic downturn bites.
Small businesses in Britain, which employ over half of the private sector workforce and annually generate some 3 trillion pounds, typically depend on loans for working capital to tide them over during lean spells.
from The Great Debate:
Let sleeping shadow banking systems lie
-- James Saft is a Reuters columnist. The opinions expressed are his own --
Rather than vainly trying to refloat the shadow banking system, the U.S. would be better off grappling with the inevitable ultimate solution -- debt destruction and inflation.
The common denominator of policies like the Term Asset-Backed Loan Facility (TALF) that was detailed on Tuesday, is that they try to solve fundamental problems with indebtedness by attempting to float asset prices high enough that they are back in proportion with the debt.
from The Great Debate:
Too many hopes pinned on EU bank
-- Paul Taylor is a Reuters columnist. The opinions expressed are his own --
It works more like a sprinkler than a power hose, but the European Investment Bank has a role to play in preventing a financial inferno from sweeping across central and eastern Europe.
The trouble is that politicians have overloaded the European Union's long-term lending arm with exaggerated expectations, calling on it like a fire brigade in every emergency, from saving credit-starved small firms to greening the car industry, combating the energy crisis and fighting climate change.
from The Great Debate:
Geithner’s hair of the dog plan for banks
-- James Saft is a Reuters columnist. The opinions expressed are his own. --
U.S. plans for a public-private fund to buy up toxic assets are likely to amount to a fig leaf with which to hide subsidies to failing banks.
It is also, inevitably, an entirely new subsidy to outside investors, who by definition will only participate if they get better terms than now available in what we formerly thought of as the free market.
