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Italian lender backs 5 bn-euro share sale

Italian bank Monte dei Paschi di Siena gave the go-ahead on Friday to a 5.0 billion euro equity raising that will boost its capital and allow it to repay a government bailout this year. The bank said in a statement the share sale would give it a strong enough "capital buffer" to withstand EU bank stress tests in the current climate of "high uncertainty and limited visibility". The increase will also allow the lender to speed up a restructuring plan, due to be completed by 2017, that includes 8,000 job cuts and the closure of 550 branches.

Greek central bank chief Provopoulos says wants second term

By Harry Papachristou ATHENS (Reuters) - Greece's central bank chief George Provopoulos said on Friday he would accept a second term at the helm of the Bank of Greece <BOGr.AT> if the government offered it to him when his current one expires in June. Asked in an interview on private television station Skai if he wanted to keep his post for another six years, Provopoulos said: "Yes, I am on active service," adding this was a decision for the government of Prime Minister Antonis Samaras to make.

Greece can use bank rescue cushion to avert new bailout

Greece wants to use some 11 billion euros ($15 billion) left in its EU bank rescue package to meet upcoming needs and avoid a new bailout loan, a government source said on Wednesday. "The 11 billion euros can keep Greece from needing a third loan," a Greek finance ministry source said on the sidelines of a two-day Eurogroup meeting in Athens. "We are covered for the next 12 months. With this 11 billion we will be covered to 2016. It's simple logic," said the official, speaking on condition of anonymity.

Greece wants lenders to agree bailout review without bank deal

By Lefteris Papadimas ATHENS (Reuters) - Greece has asked its international lenders to approve its latest bailout review despite an unresolved dispute over how much new capital its banks need, a senior finance ministry official said on Wednesday. Greece no longer expects an overall deal with the lenders by next week, the official said.

Bruegel think-tank study estimates Greece will need $55 billion more in bailout loans

BRUSSELS - An influential think-tank estimates Greece will need a third package of international bailout loans worth 40 billion euros ($55 billion) to reduce its debt burden to a sustainable level by 2030. Brussels-based Bruegel said in a study published Thursday that currently discussed plans to only extend the maturity and lower the interest rates on Greece's outstanding debt won't be sufficient. Greece's European partners and the International Monetary Fund have kept the debt-stricken country afloat since 2010 with bailout loans worth 240 billion euros.

Fed's Lacker calls for new laws to end too-big-to-fail threat

PALO ALTO, California (Reuters) - Calling too-big-to-fail banks "the most critical issue facing our financial system," a top Federal Reserve official on Tuesday urged new laws to address the problem, including ending Fed emergency lending powers. "During the crisis, and still today, many people view government-provided backstops to large financial firms as a necessity to prevent financial system malfunctions," Richmond Federal Reserve President Jeffrey Lacker said in remarks prepared for delivery to the Stanford Institute for Economic Policy Research.

Euro zone may scrap option of direct bank recapitalization in 10 years

By Martin Santa and Jan Strupczewski BRUSSELS (Reuters) - Euro zone governments are considering inserting a "review clause" into their agreement on the direct recapitalization of banks so that they can reverse or renegotiate the deal in the coming years, officials have told Reuters. Under the proposal, governments would be able to review direct recapitalization - one of the most hard-fought-over principles of the debt crisis - after 10 years, once a single euro zone bank resolution fund (SRF) is in place.

Treasury to recoup $3B from sale of 410,000 Ally Financial shares, retains 37 per cent stake

WASHINGTON - The Treasury Department says it plans to sell 410,000 shares of Ally Financial for $3 billion as part of its ongoing effort to recoup the costs of the $700 billion financial bailout. The shares will be offered in a private offering at $7,375 each. After the completion of the stock sale, the department says the U.S. government will have recovered about $15.3 billion, or 89 per cent of the $17.2 billion it provided to Ally during the financial crisis. The government will still hold about 37 per cent of the bank holding company's stock.

Bailout chiefs warn Spain to push on with reforms

International creditors who rescued Spain's tottering banks said Monday the sector was on the way to recovery but warned Madrid to be vigilant as the bailout winds up. "The process of restructuring of banks having received state aid is well underway," the European Commission said in a statement, following its latest visit along with the International Monetary Fund to assess Spain's progress. "Efforts under the program have made the banking system stronger, safer, and leaner, as has important policy progress at the European level," the IMF said in a separate statement.

EU nations agree rules on bank bailouts

EU nations agreed new rules for bank bailouts or "bail-ins" late Wednesday, to save taxpayers from paying for the rescue of ailing financial institutions, an official said. "Big step tonight," EU Commissioner Michel Barnier wrote on Twitter. "Taxpayers (are) no longer in front line" to pay for banks' mistakes, he added. "Banks will have to put money aside for rainy days. We are learning lessons of crisis," he said after the agreement was reached by representatives of the European Parliament, the European Council -- the EU's executive arm -- and the 28 member states.
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