US & World News

Banks in the world are preparing in peace to work with a new Greek currency.

Some financial institutions have never cleared the drachma of their computer systems after the adoption of the euro by Greece in 2001. They would be ready in a flash if the problem of debt forced the country to return to the good old banknotes and coins denominated in drachmas.

In any case, banks are accustomed to change: they have managed the transition of financial markets to the euro in 1999 and the emergence of currency as the Estonian kroon (up ; its replacement by the euro in 2011) and the Kazakh tenge with the breakup of the Soviet Union.

Moreover, it stirs behind the scenes since 2009, when the onset of the debt crisis in Greece, says Hartmut Grossman, American society ICS Risk Advisors works with banks Wall Street.

"Many companies, particularly in Europe and also here, studying it for a long time," said Hartmut Grossman. "All financial institutions are prepared for this eventuality. The departure of Greece in the euro area is not a new idea."

The European Union says it wants to keep the euro in Greece. Polls show that the Greeks want to keep the single currency. But they also voted last Sunday for parties opposed to the bailout of the EU and the International Monetary Fund, which has again raised doubts about the maintenance of the country within the Ten- Sept.

EXCHANGE CONTROL

If Greece leaving the euro, it certainly would impose exchange controls, say bankers, which would not prevent dealings in the new currency.

"The rooms specializing in foreign exchange markets can be ready fast enough. It depends on exactly how to pass out of the euro area, "said Lewis O'Donald, chief risk officer of London-based investment bank Nomura Japan

.. The currency ……. not freely tradable, as the Chinese yuan, followed in markets other than through the use of derivatives such as contracts term for example

. If Greece chooses a fixed exchange rate, everything will depend on the exchange ratio used. If the government chooses a euro for a new drachma, such parity would not be sustainable for very long and would involve major losses for banks Banks

. é ; tudié opportunities to protect themselves but few have taken concrete steps

. "Banks are very, trè s reluctant to start shouting fire. They know what's going on (would) and what would a panic, "said a London lawyer to advise financial institutions

. Most people just check the law applicable to their contracts, are covered against defects and examine all the legal problems that an outflow of Greece to the euro could raise … Simulations

…… have been made. But we do not really know how to operate an output

…. ….. "For transactions denominated in euro, what will their status in case of change in the nature of this currency?" asks Miles Kennedy, a partner at PricewaterhouseCoopers

.

Bertelsmann announced Wednesday for the first quarter of 2012 up 13% of operating profit and 5% of its turnover, confirming its annual target of moderate growth CA

The first media group in Europe – which has among others the broadcasting group RTL and publisher Random House – said that its operating profit (EBIT) reached 280 million euros against 248 million a year ago.

"For the full year, we are confident to achieve our goal of moderate growth in sales, EBIT stable at a high , and an increase in profit after minority interests, "said Thomas Rabe said in a statement, chief executive of Bertelsmann. 

RTL Group also announced Wednesday an increase in sales during the first quarter. Growth on French and German advertising markets offset a continued decline in Southern Europe and East.

Bertelsmann, which focuses on digital and abroad to spur growth, announced in late March a change in legal structure, which might suggest that the group is more strongly opposed to an introduction scholarship.

China Petrochemical (Sinopec) is in talks with the Spanish oil group Repsol to buy its Argentine subsidiary YPF, so that its potential nationalization, reported Tuesday a Chinese site for financial information.

According Caixin.com, citing a source close to Sinopec, the Asian oil company has found a non-binding agreement to take control of YPF for more than 15 billion dollars (11.4 billion euros).

A Sinopec spokesman declined to comment on "market rumors".

For its part, the president of Repsol Antonio Brufau said at a press conference that the tanker had received many expressions of interest from international groups to take a stake in YPF but did not comment on the information on Sinopec. 

Also according to the site Caixin.com, Sinopec estimated oil reserves of YPF in Argentina have a potential for development. The group ensures to meet the requirements of the Argentine government to accelerate the development and production.

The Argentine President Cristina Fernandez announced Monday it would ask Congress for the expropriation of 51% of YPF's energy group, immediately attracting the warnings of important trading partners and in particular a strong reaction from Spain.

BNP Paribas and Societe Generale Wednesday reaffirmed their commitment to carry through their plan to reduce balance sheet.

Speaking at a conference organized by Morgan Stanley in London, Jean-Laurent Bonnafe, the CEO of BNP Paribas, has announced that the bank would be able to completed by the end of her program initiated in the second half of 2011, at the height of the debt crisis in the euro area.

He recalled that the group had given the end of February to the U.S. bank Wells Fargo loan portfolio to oil companies and sold in early March a 28 , 7% in the property company Klépierre. 

"Our number one priority remains the implementation of our plan to reduce balance (…) In all, we have already achieved 70% of the program," said ; John Lawrence Bonnafé.

BNP Paribas announced in September will reduce by 10% the size of its balance sheet by the end of 2012. In late 2011, its assets amounted to 1.965 billion euros against 1.998 billion at end-2010.

Speaking at the same conference, the CEO of Société Générale Frédéric Oudéaa assured that SocGen, whose market capitalization has shrunk by half last year, was also determined to achieve the reduction of its balance sheet.

"The deleveraging will continue," said Frederic Oudéa. "We have clear objectives."

During the fourth quarter of 2011, SocGen sold for 10 billion euros in assets, but analysts still expect the bank's most significant disposals to strengthen its solvency.

"BNP CLEARLY IN ADVANCE"

"On the 'deleveraging' (reducing balance, Ed), BNP Paribas is clearly ahead, with an impact on NLP ('profit and loss', Ed) quite limited. It's rather good news, "said Alex Koagne, an analyst at Natixis

." However, the Company General ; eral, I think they come to do their 'deleveraging' on the sale of loans but they are now waiting on disposal of business units, "he says ……

… "It's been several months since they announced they would sell assets and there was still nothing yet."

To strengthen their financial strength undermined by the crisis in the euro area and alleviate tensions in interbank liquidity, European banks have also begun to re reduce and diversify their funding sources and reduce their financing needs

. Their difficulties in dollar funding has also forced the European Central Bank has injected over $ 1.000 billion euros of liquidity to three years (LTRO) in the European banking system.

BNP Paribas said the bank had reached since the beginning of the year 60% of its funding needs for 2012, raising 12 billion euros between January 1 and March 22.

Societe Generale, for its part said it has raised 7.6 billion euros of debt since the beginning of the year, with a maturity average of 6.3 years.

SocGen is continuing its efforts to restructure its BFI, said its CEO. This table and a reduction of 50 to 60 billion euros of liquidity needs by 2013 in these activities.

In exchange, like most European banking stocks, securities of French banks have closed in the red Wednesday because of investor concerns about growth in the U.S. and the budgetary situation of Spain.

In Paris, BNP Paribas and Societe Generale ended the session down 1.3% and 2.89% respectively. Credit Agricole – who canceled his participation at the London conference – sold 2.82%. The European banking index ended down 1.45%.

Sales of new homes fell again in February in the United States. The lack of foreclosures flooding the housing market of goods at bargain prices. Average prices of back nine, however.

The housing market is still recovering from nine United States. Sales of new single in February fell for the second consecutive month, according to figures released Friday by the Washington Department of Commerce. They fell 1.6% from January, seasonally adjusted data, to 313,000 annualized transactions. He had declined by 5.4% the previous month (revised up).

Sales of new single are depressed for several years in the United States. Over the whole of 2011, sales fell 5.3%. The government has identified this year that 306,000 sales, is the lowest number ever recorded in its annals, dating back to January 1963. Sales of new homes suffer from competition caused by the high number of foreclosures caused by the crisis, resulting in the housing market an influx of goods sold at bargain prices detrimental to developers.

Despite the decline in sales, the average transaction price in February rose 2.2% on month and 1.8% yoy, to $ 267,700 dollars.

The ministry said there were 150,000 new homes for sale in the U.S. in late February, as much as a month earlier when the supply of such goods had fallen to its lowest level since January 1963 at least.

Fifteen of the nineteen major institutions have passed the exam successfully. Good students already announced increases in dividends to pamper their shareholders. Following the results, JPMorgan announced a dividend increase.

The Central Bank of the United States said Tuesday that fifteen of the nineteen banks that it had submitted to the 2012 version of its stress tests were successfully passed this examination.

The coregistered are: Ally, the former GMAC, saved from bankruptcy by the state in 2009 and still belonging to the Treasury, the insurer MetLife, SunTrust, Bank of Atlanta and Citigroup.  

The former world number one, also saved from bankruptcy by the state, failed narrowly on two criteria: its own funds fall below the hard limit (4.9%, against 5% required) and its leverage ("Tier 1 leverage ratio") also (2.9%, against 3% required).

Other banks (American Express, Bank of America, The Bank of New York Mellon, BB & T, Capital One, Fifth Third, Goldman Sachs, JPMorgan, Keycorp, Morgan Stanley, PNC, Regions Financial, State Street, Wells Fargo US Bancorpet have passed the exams successfully

. In the wake of the results, several large U.S. banks, including JPMorgan Chase and Wells Fargo, have announced they will upgrade the remuneration of their shareholders

. At JPMorgan is revalued quarterly dividend by 20% from 25 to 30 cents per share. In addition the bank, the largest in the U.S., has announced a new share repurchase program of up to $ 15 billion, including up to $ 12 billion will be spent this year, the balance in the first quarter in 2013.

"We are pleased to be in a position to increase our dividend and to introduce a new share buyback program," said the CEO of JPMorgan Chase, Jamie Dimon, said in the statement. "We expect to repurchase at least the number of shares we will issue the form of bonuses for employees. Beyond this, we plan to repurchase the securities that when we generate more capital than is required to fund organic growth, and when we think it brings a great value for shareholders, "he added.

At Wells Fargo, the dividend jumped 83% from 12 to 22 cents. The bank said it would buy back more shares than last year, without quantifying its projects.

Finance ministers of the euro area have endorsed Monday night the second aid package to Greece after the success of the restructuring process of the Greek debt, announced the Eurogroup President Jean-Claude Juncker.

He said that the Greek debt level should be reduced to 117% of gross domestic product (GDP) by 2020 through in terms of private sector involvement (PSI ) carried out last week via a bond exchange.

"We discussed the second Greek plan, including of course the issue of the PSI. With the completion of previous steps and the success of the PSI, the new plan is not only Greek in the starting blocks but has been adopted by political Eurogroup this (Monday) evening, "said one who is also Prime Minister of Luxembourg

. The formalization of this agreement in principle should be Wednesday morning, during a technical meeting of the euro area, said Jean-Claude Juncker

. He praised the high turnout private creditors to exchange debt and recalled that the initial objective was to reduce the level of debt at 121.5% of Greek GDP …….

.. "We agreed that this result better than expected should not be spent by the Greek authorities but retained as a safety cushion ;, "he said

.

Over 80% of private creditors of Athens agreed to exchange their debt securities against other securities whose value has been reduced by 50%. The agreement paves the way for the release of a new loan to avoid bankruptcy the country unchecked. Three of the four ministers of the Greek far-right party Laos opposing the new austerity measures demanded by the creditors of the countries presented their resignations Friday, February 10

Greece has raised nearly 84% acceptance of all its private creditors, including only 85.8% of bondholders under Greek law, in connection with the restructuring of its huge sovereign debt, said Friday the Greek government. If Greece has avoided a default unchecked, this rate is still insufficient compared to the 90% target that was set by the government, explaining that he had to recommend the activation of collective action clauses attached to the bonds to be exchanged.

They are forcing carriers reluctant to accept the terms of trade and should at the final acceptance rate to 95.7%, the statement said the Ministry of Finance. "The holders of approximately 172 billion euros of bonds by Greek law" have accepted the proposal made by the Hellenic Republic on February 24 to exchange their debt securities against other securities whose face value was reduced 50% said the statement.  

"I wish to express my gratitude to all our creditors who supported our ambitious program of reform and adjustment and shared sacrifices of the people in its historic effort" praised the Greek Finance Minister Evangelos Venizelos said in a statement. The exchange of specific securities to be held Monday, March 12 for bonds by Greek law, but an extension until March 23 at 0800 GMT was granted to holders of non-Greek right to present their response to the proposal. This delay does not allow those who have already joined to the bid to reverse their decision.

The partners of Greece indeed want the private sector do its part in the rescue effort of the country, with a contribution sufficient to provide debt reduction to 120.5% of GDP in 2020, a ratio expected to guarantee the country's return to solvency. Successful restructuring opens the door to the contrary release 130 billion of loans provided by the euro area in late October. These two components, debt and bailouts, make up the second bailout of the country developed its international partners, after an initial infusion of 110 billion granted in 2010.

The gross domestic product (GDP) of Finland increased by 1.4% yoy in the fourth quarter of 2011, after an increase (revised) 3.3% in the third I, Statistics Finland said on Friday (SF).

Over the whole of 2011, GDP in one of four countries in the euro area still have a "AAA" from the three major rating agencies has advanced 2.9%.

European shares reinforce their gains late Wednesday morning after the injection of almost 530 billion euros of liquidity into the European banking system as part of the second ; me refinancing long-term European Central Bank.

Traders polled by Reuters had expected that banks in the euro zone borrow some 500 billion euros, after borrowing 489 billion during the first operation to three years and at reduced rates which took place in late December.

Equity markets have increased their earnings briefly a few minutes after the announcement of the ECB before returning to previous levels. The euro also briefly mounted against the dollar before erasing its gains.

"The relaxation of collateral has worked well. We see that the central bank achieved its goal. This shows that the central bank is proactive and follows closely the situation of banks' refinancing , "said Raymond Renaud, president of Eleanor Capital.

"This is a very positive message about the state of mind in which the central bank. We see that the behavior of the central bank is increasingly close to that of the Fed."

"The market implications are positive. There are two issues of concern to markets: growth and financial stress. The subject of financial stress is very well addressed with the Greek record in the process of being resolved and the refinancing of banks, "he says

.. A ……. 11:45, the CAC 40 index advanced 0.3% after rising briefly to almost 1% and then he earned more than 0.5% shortly before the announcement of the ECB

. Other major European markets, London was almost unchanged, Frankfurt Milan took 0.5% and 0.8%

. From the European indices, the Euro Stoxx 50 gained 0.5 also Eurofirst 300% and 0.4%

. Bank stocks, which anticipated the operation from the opening, are the first measure ; res to enjoy. Farm Credit clinching nearly 4% and 1.7% Societe Generale.

The performance of the German government bond (Bund) at 10 years was 1.827%, 1.825% cons shortly before the announcement.

The euro was trading around 1.3440 dollar, while it was around 1.3465 before the announcement.