Drive for IMF Funds Caught in Global Power Shift

Drive for IMF Funds Caught in Global Power Shift 
Published: Saturday, 14 Apr 2012 | 7:24 AM ET Text Size
By: Reuters

Tensions among some of the world's leading economies have boiled up over a plan to raise new resources for the International Monetary Fund to contain the euro zone debt crisis, and a quest by emerging economies to win more say in the global lender.

World financial leaders gathering in Washington next week will focus on proposals for countries to contribute more money to the IMF so it is better prepared in case of fallout from any further escalation of Europe's debt problems.

Emerging market countries like China, Brazil and Russia are willing to provide more money for the IMF, but they want something in return: greater voting power.

http://www.cnbc.com/id/47049024

European stock markets rocked by panic selling as debt crisis reignites

European stock markets rocked by panic selling as debt crisis reignites
Investors demanding high premiums for holding Italian and Spanish bonds as fears of double-dip recession grow

Heather Stewart, Larry Elliott and Giles Tremlett in Madrid
The Guardian, Tuesday 10 April 2012

Europe's sovereign debt crisis exploded back into life on Tuesday, with markets across the continent rocked by a wave of panic selling amid renewed fears about the impact of savage austerity measures in Spain and Italy.

The mood of uneasy calm seen across Europe since the Greek bailout in February was shattered as financial markets took fright at evidence of a double-dip recession and growing popular opposition to welfare cuts and tax increases.

http://www.guardian.co.uk/world/2012/apr/10/european-stock-market-panic-selling

Portugal's domestic banks tap ECB for record amounts of funding

Portugal's domestic banks tap ECB for record amounts of funding
Bank of Portugal says domestic banks' use of European Central Bank's facilities rose to a record €56.3bn in March

The reliance of eurozone banks on the European Central Bank was demonstrated on Monday when Portugal revealed that its domestic banks were tapping the central bank for record amounts of funding.

The Bank of Portugal said the use by domestic banks for the various facilities available from the ECB rose to €56.3bn in March – up from €47.5bn in February and greater than the previous record level of €49.1bn in August 2010.

Bailed out by the EU and International Monetary Fund in April 2011 for €78bn, Portugal has €12bn earmarked for bolstering its banks' capital positions if necessary in the months ahead.

http://www.guardian.co.uk/business/2012/apr/09/portugal-banks-ecb-record-funding

"Disastrous" bond sale shakes confidence in Germany

"Disastrous" bond sale shakes confidence in Germany
by Stephen Brown and Noah Barkin
BERLIN | Wed Nov 23, 2011 10:52am EST

(Reuters) - A "disastrous" German bond sale on Wednesday sparked fears that Europe's debt crisis was even starting to threaten Berlin, with the leaders of the euro zone's two biggest economies still firmly at odds over a longer-term structural solution.

Investors were also unnerved by reports that Belgium is leaning on France to pay more into emergency support for failed lender Dexia under a 90-billion-euro ($120 billion) rescue deal that had appeared done and dusted.

A special report by Fitch Ratings suggested France had limited room left to absorb shocks to its finances like a new downturn in growth or support for banks without endangering its cherished AAA credit status.

After one of the least successful debt sales by Europe's powerhouse economy since the launch of the single currency, the euro fell to 1.336 to the dollar and European shares sank to 7-week lows.

http://www.reuters.com/article/2011/11/23/us-eurozone-idUSTRE7AM0VR20111123

European debt crisis spiralling out of control

European debt crisis spiralling out of control


Reports that Germany and France have begun talks to break up the eurozone amid fears that Italy will be too big to rescue

Fears that Europe's sovereign debt crisis was spiralling out of control have intensified as political chaos in Athens and Rome, and looming recession, created panic on world markets.

Reports emerging from Brussels said that Germany and France had begun preliminary talks on a break-up of the eurozone, amid fears that Italy will be too big to rescue.

Despite Silvio Berlusconi's announcement that he would step down as prime minister once austerity measures were pushed through parliament, a collapse of investor confidence in Europe's third-biggest economy sent interest rates in Italy to the levels that triggered bailouts in Portugal, Greece and Ireland.

http://www.guardian.co.uk/business/2011/nov/09/european-debt-crisis-eurozone-breakup

Dow Plunges 3.2% on Fears That Euro Crisis Spreading

Dow Plunges 3.2% on Fears That Euro Crisis Spreading
Wednesday, 09 Nov 2011 09:58 AM

Trouble on two fronts in Europe's debt crisis dragged the Dow Jones Industrial Average down 389 points Wednesday. The S&P 500 lost 3.7 percent, its biggest one-day drop since August, after Italy's borrowing costs soared and talks collapsed in Greece on forming a new government.

The euro dropped 2 percent against the dollar and Treasury yields sank as money moved out of Europe and traders bought U.S. government bonds. Goldman Sachs, Morgan Stanley and other large banks were hit hard on worries over their ability to handle a financial crisis that might be brought on by trouble in Europe.

Read more: http://www.moneynews.com/StreetTalk/Dow-Plunges-Fears-Italy/2011/11/09/id/417393?s=al&promo_code=D7A6-1

‘Time short’ for eurozone, says Cameron

‘Time short’ for eurozone, says Cameron
By George Parker and Lionel Barber

David Cameron has urged European leaders to take a “big bazooka” approach to resolving the eurozone crisis, warning they have just a matter of weeks to avert economic disaster.

The UK prime minister wants France and Germany to bury their differences and to adopt before the end of the year what he claims would be a decisive five-point plan to end the uncertainty, which was having a “chilling effect” on the world economy.

Meanwhile, on Sunday, Angela Merkel, the German chancellor, and France’s President Nicolas Sarkozy spelt out their determination to defend the stability of the euro as they met for a bilateral summit in Berlin, though they refused to spell out details of their plans.


http://www.ft.com/intl/cms/s/0/bd7d2ed0-f26e-11e0-824e-00144feab49a.html#axzz1aK5umUz2

Now the IMF Needs A Bailout

Christine Lagarde: IMF may need billions in extra funding
Louise Armitstead and Jonathan Russell8:04PM BST 25 Sep 2011

Christine Lagarde has signalled that the International Monetary Fund (IMF) may have to tap its members – including Britain – for billions of pounds of extra funding to stem the European debt crisis.

The head of the IMF has warned that its $384bn (£248bn) war chest designed as an emergency bail-out fund is inadequate to deliver the scale of the support required by troubled states.

In a document distributed to the IMF steering committee at the weekend, Ms Lagarde said: "The fund's credibility, and hence effectiveness, rests on its perceived capacity to cope with worst-casescenarios. Our lending capacity of almost $400bn looks comfortable today, but pales in comparison with the potential financing needs of vulnerable countries and crisis bystanders."

http://www.telegraph.co.uk/finance/financialcrisis/8788223/Christine-Lagarde-IMF-may-need-billions-in-extra-funding.html

Warnings mount on euro crisis, BRICS mull more aid

Warnings mount on euro crisis, BRICS mull more aid
By David Lawder and Walter Brandimarte

WASHINGTON - World leaders and finance chiefs pushed Europe to quell its debt crisis and big emerging economies said they might provide more money to help stop the chaos from spreading.

As finance ministers and central bankers gathered for talks amid growing concern about sharply slowing growth and plunging stock markets, the leaders of seven big economies stressed the need to contain the euro zone crisis.

"Euro zone governments and institutions must act swiftly to resolve the euro crisis and all European economies must confront the debt overhang to prevent contagion to the wider global economy," the leaders of Australia, Canada, Indonesia, Britain, Mexico, South Africa and South Korea wrote in an open letter to France, chair of the Group of 20 leading economies.

http://www.gmanews.tv/story/233185/business/warnings-mount-on-euro-crisis-brics-mull-more-aid

Europe's debt crisis prompts central banks to provide dollar liquidity

Europe's debt crisis prompts central banks to provide dollar liquidity
European and US stocks surge on news that world banks will flood markets – but Lagarde warns of 'dangerous' new phase

Larry Elliott, economics editor and Dominic Rushe in New York
guardian.co.uk, Thursday 15 September 2011 16.12 EDT

Fears of a deepening of Europe's debt crisis have prompted the world's leading central banks to pump US dollars into the financial system, in a co-ordinated action designed to boost market confidence.

The Bank of England joined the US Federal Reserve, the European Central Bank, the Swiss National Bank and the Bank of Japan on Thursday to announce that they would flood money markets with dollars over the coming months.

The move, on the third anniversary of the collapse of the US investment bank Lehman Brothers, sent shares soaring in banks heavily exposed to debt default by Greece and the other struggling members of the 17-nation eurozone. The euro, which had been falling in recent days, rebounded, rising roughly 1% in European trading on Thursday.

http://www.guardian.co.uk/business/2011/sep/15/world-banks-flood-markets-with-dollars

IMF threatens to withhold Greek loan

IMF threatens to withhold Greek loan
By Peter Spiegel in Brussels, Alan Beattie in Washington and Joshua Chaffin in Wroclaw, Poland

Christine Lagarde, head of the International Monetary Fund, on Thursday raised the spectre of her organisation withholding its portion of an €8bn ($11bn) aid payment Greece needs by the end of this month, saying Athens had implemented requisite economic reforms “in parts”.

Speaking ahead of a highly anticipated meeting of IMF, US and European finance officials in Poland, Ms Lagarde said Athens had to re-ignite “the urge to deliver on commitments” made by its government after a period during which “momentum had slowed down”.

http://www.ft.com/intl/cms/s/0/b6ded476-dfb2-11e0-8e15-00144feabdc0.html#axzz1Y7YSoLeW

UBS: Euro Can't Survive, Demise to Spark Chaos

UBS: Euro Can't Survive, Demise to Spark Chaos
Wednesday, 07 Sep 2011 12:39 PM
By Forrest Jones

The euro cannot exist in its current state, and with its demise authoritarianism and possibly civil war could consume parts of Europe, global financial giant UBS writes in a report.

"Under the current structure and with the current membership, the euro does not work. Either the current structure will have to change, or the current membership will have to change," UBS says in the report, according to Zero Hedge.

The currency has been embattled by debt crises in peripheral countries like Greece and Italy and threatens to spread, while healthier countries are debating on how to rescue those in trouble and preserve the monetary union.

http://www.moneynews.com/StreetTalk/UBS-Euro-Survive-Demise/2011/09/07/id/410069?s=al&promo_code=CFE8-1

In Euro Zone, Banking Fear Feeds on Itself

In Euro Zone, Banking Fear Feeds on Itself
By LANDON THOMAS Jr. and NELSON D. SCHWARTZ
Published: September 6, 2011

Remember the collapse of Lehman Brothers? Europeans certainly do

As Europe struggles to contain its government debt crisis, the greatest fear is that one of the Continent’s major banks may fail, setting off a financial panic like the one sparked by Lehman’s bankruptcy in September 2008.

European policy makers, determined to avoid such a catastrophe, are prepared to use hundreds of billions of euros of bailout money to prevent any major bank from failing.

But questions continue to mount about the ability of Europe’s banks to ride out the crisis, as some are having a harder time securing loans needed for daily operations.

American financial institutions, seeking to inoculate themselves from the growing risks, are increasingly wary of making new short-term loans in some cases and are pulling back from doing business with their European counterparts — moves that could exacerbate the funding problems of European banks.

http://www.nytimes.com/2011/09/07/business/global/in-euro-zone-banking-fear-feeds-on-itself.html?_r=2

EU Struggles to Tame Crisis Amid Contagion

EU Struggles to Tame Crisis Amid Contagion

By James G. Neuger - Aug 5, 2011 4:11 AM ET

European leaders hunted for solutions to the rampaging debt crisis after the resumption of the European Central Bank’s bond-buying program failed to prop up securities in Italy and Spain.

As global stock markets sank for an eighth day, the European Commission called for another reinforcement of the European Financial Stability Facility, the 440 billion-euro ($623 billion) rescue fund for distressed euro-area states.

“To be effective, the EFSF needs to be credible and respected by the markets,” European Union Economic and Monetary Commissioner Olli Rehn said on BBC Radio 4’s Today program.

Europe’s fractious government leaders were back in the spotlight after a divided ECB restarted its bond-purchase program yesterday following a four-month hiatus. The central bank refused to extend the purchases to Italy and Spain, the two countries at the center of the current turmoil.

http://www.bloomberg.com/news/2011-08-05/europe-struggles-to-tame-crisis-as-ecb-bond-buying-fails-to-halt-contagion.html

Euro under siege as now Portugal hits panic button

Euro under siege as now Portugal hits panic button

By Bruno Waterfield and Robert Winnett, The Daily Telegraph

Read more: http://www.montrealgazette.com/business/Euro+under+siege+Portugal+hits+panic+button/3831814/story.html#ixzz15RTqDLrZ

The euro is facing an unprecedented crisis after another country indicated on Monday night that it was at a "high risk" of requiring an international bail-out.

Portugal became the latest European nation to admit it was on the brink of seeking help from Brussels after Ireland confirmed it had begun preliminary talks over its debt problems.

Greece also disclosed that its economic problems are even worse than previously thought.

Angela Merkel, the German Chancellor, raised the spectre of the euro collapsing as she warned: "If the euro fails, then Europe fails."

European finance ministers will meet in Brussels on Tuesday to begin discussions over a new European stability plan that is expected to result in billions of pounds being offered to Ireland, Portugal and possibly even Spain.

Read more: http://www.montrealgazette.com/business/Euro+under+siege+Portugal+hits+panic+button/3831814/story.html#ixzz15RTWcnlK

Hungary : Can you say domino ?

Hungary's deficit talk rattles financial markets

Jun 4, 1:54 PM (ET)

http://apnews.myway.com/article/20100604/D9G4JRR80.html

BUDAPEST, Hungary (AP) - Hungary's currency, bonds and stock market reeled Friday as the new government tried to reassure investors that it was not about to slide into a Greek-type crisis despite official comments that the economy was in serious trouble.

Fears that the economic peril could spread weighed heavily on the euro. The currency dropped below $1.20 for the first time in more than four years, falling to as little as $1.1994 in late European trading before edging back up to $1.2006. That was its lowest level since March 2006.

On Thursday, Lajos Kosa, deputy chairman of the governing Fidesz party, said Hungary was facing a Greece-like financial meltdown. And former Fidesz finance minister Mihaly Varga said the deficit could reach 7-7.5 percent of GDP, about twice as much as planned for 2010 by the previous government.

The new government was sworn in Saturday and its talk about a massively revised budget gap was eerily similar to the situation in Greece. There, the 2009 deficit went from a planned 3.7 of GDP to 13.6 percent of GDP by year's end and led to the financial crisis, which saw Greece get a euro110 million ($134.95 million) rescue package from the European Union and the International Monetary Fund to save it from bankruptcy.

International markets reacted quickly to the parallels drawn between Hungary and Greece, evidence that concerns about budget deficits in Europe continued to worry the markets.

http://apnews.myway.com/article/20100604/D9G4JRR80.html

Jim Cramer: Europe to Collapse in 48 Hours – or Never

"If we don’t see total capitulation in Europe over the next two days, Cramer said during Wednesday's Stop Trading!, investors may have to admit that the Continent is “merely” suffering a downturn. Because the repercussions from the expectations of a collapse, which have fed the negativity in the American markets and driven down stocks, can’t continue for much longer without it actually happening."

California is a greater risk than Greece, warns JP Morgan chief

California is a greater risk than Greece, warns JP Morgan chief
Jamie Dimon, chairman of JP Morgan Chase has warned American investors should be more worried about the risk of default of the state of California than of Greece's current debt woes.

By James Quinn, US Business Editor in New York

Mr Dimon told investors at the Wall Street bank's annual meeting that "there could be contagion" if a state the size of California, the biggest of the United States, had problems making debt repayments. "Greece itself would not be an issue for this company, nor would any other country," said Mr Dimon. "We don't really foresee the European Union coming apart." The senior banker said that JP Morgan Chase and other US rivals are largely immune from the European debt crisis, as the risks have largely been hedged.

California however poses more of a risk, given the state's $20bn (£13.1bn) budget deficit, which Governor Arnold Schwarzenegger is desperately trying to reduce.

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/7326772/California-is-a-greater-risk-than-Greece-warns-JP-Morgan-chief.html