Greece Pours $22.6 Billion Into Four Biggest Banks
Published: Monday, 28 May 2012 | 1:24 PM ET
By: REUTERS
"The funds have been disbursed," an official at the Hellenic Financial Stability Facility, who declined to be named, told Reuters.
The HFSF was set up to funnel funds from Greece's bailout programme to recapitalise its tottering banks. The HFSF allocated 6.9 billion euros to National Bank, 1.9 billion to Alpha, 4.2 billion to Eurobank and 5 billion to Piraeus.
All four are scheduled to report first-quarter earnings this week.
The news came as two government officials told Reuters that near-bankrupt Greece could access 3 billion euros, left from its first bailout programme, to cover basic state payments if efforts to revive falling tax revenue fail.
"Our finance ministry efforts at this time are focused on boosting revenue," one official told Reuters. But he added that if these efforts failed they would "examine all alternatives, including the 3 billion euros from the first bailout."
Greek state coffers are on track for a more than 10 percent fall in revenue this month, a senior finance ministry official said last week. Officials had warned the state could run out of cash to pay pensions and salaries by end-June.
The 3 billion euros is held in an intermediate HFSF account.
Greece has been struggling through a fifth year of recession and political turmoil, triggered by an inconclusive vote this month that has fanned fears the country could be forced to leave the euro zone.
The country's struggling banks have been among those hit hardest by the uncertainty, with a rise in deposit outflows.
Huge writedowns from a landmark restructuring to cut Greece's debt nearly erased the capital base of its biggest four banks, which rely on the ECB and the Bank of Greece to meet their liquidity needs, after savers began pulling their cash out on fears that Greece could go bankrupt and out of the euro zone.
Last week the ECB stopped providing liquidity to some Greek banks because their capital base was depleted.
With access to wholesale funding markets shut on sovereign debt concerns, Greek banks have been borrowing from the ECB against collateral, and from the Greek central bank's more expensive emergency liquidity assistance (ELA) facility.
Bleeding deposits, the country's lenders have borrowed 73.4 billion euros from the ECB and 54 billion from the Bank of Greece via the ELA as of end-January.
Together, the sums translate to about 77 percent of the banking system's household and business deposits, which stood at about 165 billion euros at the end of March.
Funded by the euro zone and the IMF, the HFSF is due to inject up to 50 billion euros into the country's banks in return for shares which it hopes to sell some day.
The funds are part of a second, 130-billion euro bailout Greece agreed this year with its euro zone partners and the IMF to stave off bankruptcy.
So far the HFSF has received 25 billion euros under the scheme and the 18 billion euros it disbursed on Monday is its largest payout to banks.
Key details of the recapitalisation plan for Greece's battered banking sector, including the mix of new shares and convertible bonds to be issued, and whether call options will be included as incentives, remain unclear.
That framework is expected to be finalised after a government is formed, following a June 17 election.
Published: Monday, 28 May 2012 | 1:24 PM ET
By: REUTERS
PNC | Brand X Pictures | Getty Images
The long-awaited injection—via bonds from the European Financial Stability Facility rescue fund—will boost the nearly depleted capital base of National Bank, Alpha , Eurobank and Piraeus Bank. "The funds have been disbursed," an official at the Hellenic Financial Stability Facility, who declined to be named, told Reuters.
The HFSF was set up to funnel funds from Greece's bailout programme to recapitalise its tottering banks. The HFSF allocated 6.9 billion euros to National Bank, 1.9 billion to Alpha, 4.2 billion to Eurobank and 5 billion to Piraeus.
All four are scheduled to report first-quarter earnings this week.
The news came as two government officials told Reuters that near-bankrupt Greece could access 3 billion euros, left from its first bailout programme, to cover basic state payments if efforts to revive falling tax revenue fail.
"Our finance ministry efforts at this time are focused on boosting revenue," one official told Reuters. But he added that if these efforts failed they would "examine all alternatives, including the 3 billion euros from the first bailout."
Greek state coffers are on track for a more than 10 percent fall in revenue this month, a senior finance ministry official said last week. Officials had warned the state could run out of cash to pay pensions and salaries by end-June.
The 3 billion euros is held in an intermediate HFSF account.
Greece has been struggling through a fifth year of recession and political turmoil, triggered by an inconclusive vote this month that has fanned fears the country could be forced to leave the euro zone.
The country's struggling banks have been among those hit hardest by the uncertainty, with a rise in deposit outflows.
Huge writedowns from a landmark restructuring to cut Greece's debt nearly erased the capital base of its biggest four banks, which rely on the ECB and the Bank of Greece to meet their liquidity needs, after savers began pulling their cash out on fears that Greece could go bankrupt and out of the euro zone.
Last week the ECB stopped providing liquidity to some Greek banks because their capital base was depleted.
With access to wholesale funding markets shut on sovereign debt concerns, Greek banks have been borrowing from the ECB against collateral, and from the Greek central bank's more expensive emergency liquidity assistance (ELA) facility.
Bleeding deposits, the country's lenders have borrowed 73.4 billion euros from the ECB and 54 billion from the Bank of Greece via the ELA as of end-January.
Together, the sums translate to about 77 percent of the banking system's household and business deposits, which stood at about 165 billion euros at the end of March.
Funded by the euro zone and the IMF, the HFSF is due to inject up to 50 billion euros into the country's banks in return for shares which it hopes to sell some day.
The funds are part of a second, 130-billion euro bailout Greece agreed this year with its euro zone partners and the IMF to stave off bankruptcy.
So far the HFSF has received 25 billion euros under the scheme and the 18 billion euros it disbursed on Monday is its largest payout to banks.
Key details of the recapitalisation plan for Greece's battered banking sector, including the mix of new shares and convertible bonds to be issued, and whether call options will be included as incentives, remain unclear.
That framework is expected to be finalised after a government is formed, following a June 17 election.
Futures red
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First ECB, Now China Says Has "No Plans For Massive Stimulus"
Submitted by Tyler Durden on 05/29/2012 - 20:06
After Hours Ben Bernanke Bloomberg News China Credit Crisis Credit Suisse European Central Bank Fail Shadow Banking Standard Chartered Yuan
First the ECB kicked the stimulus junkies in the crotch in the after hours session, now the PBOC is about to eat their faces for breakfast as both rumors causing overnight and intraday stock ramps are systematically denied. From Bloomberg: "China has no plan to introduce stimulus measures to support growth on the scale unleashed during the depths of the global credit crisis in 2008 according to the nation’s state-run Xinhua News Agency. “The Chinese government’s intention is very clear: It will not roll out another massive stimulus plan to seek high economic growth,” Xinhua said yesterday in the seventh paragraph of a Chinese-language article on economic policy, without attributing the information. “The current efforts for stabilizing growth will not repeat the old way of three years ago." And with that the rug is pulled out from below anyone praying for non-Fed stimulus.
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First ECB, Now China Says Has "No Plans For Massive Stimulus"
Submitted by Tyler Durden on 05/29/2012 - 20:06
After Hours Ben Bernanke Bloomberg News China Credit Crisis Credit Suisse European Central Bank Fail Shadow Banking Standard Chartered Yuan
First the ECB kicked the stimulus junkies in the crotch in the after hours session, now the PBOC is about to eat their faces for breakfast as both rumors causing overnight and intraday stock ramps are systematically denied. From Bloomberg: "China has no plan to introduce stimulus measures to support growth on the scale unleashed during the depths of the global credit crisis in 2008 according to the nation’s state-run Xinhua News Agency. “The Chinese government’s intention is very clear: It will not roll out another massive stimulus plan to seek high economic growth,” Xinhua said yesterday in the seventh paragraph of a Chinese-language article on economic policy, without attributing the information. “The current efforts for stabilizing growth will not repeat the old way of three years ago." And with that the rug is pulled out from below anyone praying for non-Fed stimulus.
i bought 2 stocks today ironically....i added to my ARR position....and bought some shares in FTE....more divy plays
so for all i care this market can go to 6k as long as it takes OIL down with it....id love to see this market shit the bed and take down oil with it. my biggest non-discretionary expense is gas just driving to and from work and it kills me....i tell my gf all the time id be living like a king if i didnt have to pay for gas
so for all i care this market can go to 6k as long as it takes OIL down with it....id love to see this market shit the bed and take down oil with it. my biggest non-discretionary expense is gas just driving to and from work and it kills me....i tell my gf all the time id be living like a king if i didnt have to pay for gas
and trade war is on.......
Korean Washer Exporters to Pay U.S. Duties as High as 71%
The U.S. Commerce Department proposed duties of as much as 71 percent on large, residential washing machines made in South Korea, concluding that government subsidies for the goods undercut U.S. producers.
The agency announced a preliminary finding yesterday after Whirlpool Corp. (WHR) of Benton Harbor, Michigan, said in a Dec. 30 complaint that LG Electronics Inc. (066570) and Daewoo Electronics Corp., both based in Seoul, and Samsung Electronics Co. (005930) of Suwon, South Korea, sell washers in the U.S. for less than production costs.
Daewoo was told to pay 71 percent, Samsung 1.2 percent and LG Electronics 0.22 percent on their portions of $569 million in annual imports from South Korea, according to the Commerce Department. All other companies would pay 1.2 percent. The duty set for Daewoo reflects the company’s refusal to respond to the U.S. investigation, the agency said.
Whirlpool is pleased “given the proven record that South Korean appliance producers have benefitted from their government’s subsidies that violate trade law,” Kristine Vernier, a spokeswoman, said in a statement.
Whirlpool closed up 30 cents to $63.13 in New York Stock Exchange trading, and touched $65.45 after the announcement.
http://www.bloomberg.com/news/2012-...rters-to-pay-u-s-duties-as-high-as-71-1-.html
Korean Washer Exporters to Pay U.S. Duties as High as 71%
The U.S. Commerce Department proposed duties of as much as 71 percent on large, residential washing machines made in South Korea, concluding that government subsidies for the goods undercut U.S. producers.
The agency announced a preliminary finding yesterday after Whirlpool Corp. (WHR) of Benton Harbor, Michigan, said in a Dec. 30 complaint that LG Electronics Inc. (066570) and Daewoo Electronics Corp., both based in Seoul, and Samsung Electronics Co. (005930) of Suwon, South Korea, sell washers in the U.S. for less than production costs.
Daewoo was told to pay 71 percent, Samsung 1.2 percent and LG Electronics 0.22 percent on their portions of $569 million in annual imports from South Korea, according to the Commerce Department. All other companies would pay 1.2 percent. The duty set for Daewoo reflects the company’s refusal to respond to the U.S. investigation, the agency said.
Whirlpool is pleased “given the proven record that South Korean appliance producers have benefitted from their government’s subsidies that violate trade law,” Kristine Vernier, a spokeswoman, said in a statement.
Whirlpool closed up 30 cents to $63.13 in New York Stock Exchange trading, and touched $65.45 after the announcement.
http://www.bloomberg.com/news/2012-...rters-to-pay-u-s-duties-as-high-as-71-1-.html
