ECB

Germany’s Angela Merkel, left, and France’s François Hollande at the EU summit in Brussels.

With the eurozone crisis response slowing to a crawl, Friday’s early-morning agreement setting a timetable for a new single eurozone bank supervisor is probably best judged with textual analysis, since the deal is so incremental it’s hard to really judge without a close look at the details.

The key change between the communiqué agreed in June and the one agreed Friday is the firming up of when, exactly, the new supervisor, to be run by the European Central Bank, will start and how long it will take to be phased in. The June deal was immensely vague on this point:

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By Ruona Agbroko

Today’s selection of interesting articles from around the web:

By Ruona Agbroko

Here are some of the articles that have grabbed our attention from today’s FT and elsewhere:

Welcome to our rolling coverage of the eurozone crisis. Mario Draghi has unveiled the ECB’s bond-buying scheme. By Tom Burgis, Ben Fenton,  John Aglionby and Ruona Agbroko on the newsdesk in London and Anjli Raval in New York with contributions by FT correspondents around the world. All times are BST.

21.40 As we close up today’s blog, here is a last US markets round-up from Arash Massoudi in New York:

What a day for equities on Wall Street. US stocks  jumped to their highest closing level since January 2008 as investors piled into risk assets.

The benchmark S&P 500 rose 2.04 per cent to finish at 1,432.12. All ten broad sector groups on the index moved more than 1 per cent higher. Financials were among the day’s top performers with bulge bracket banks enjoying hefty gains. Bank of America rose 5 per cent to $8.35, Citigroup climbed 4.5 per cent to $31.12 and JPMorgan Chase gained 4.3 per cent to $38.69. Broadly, the S&P 500 is up 13.9 per cent since the start of the year.

The Nasdaq closed at its highest level since December 2000.

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A real variety of articles got us chatting today. Here are our recommendations: 

We selected these articles for you today:

Here’s what we’ve been chatting about today: 

The Olympics are on our doorstep, but we’re still picking up interesting articles from around the world:

The future premises of the European Central Bank (ECB) © RTT

The ECB's future premises. Image: RTT

I was amused to read in the FT survey of Frankfurt today that the European Central Bank is building itself a new headquarters in Frankfurt. Read more

Welcome back to our live coverage of the eurozone crisis. By Tom Burgis and Esther Bintliff on the news desk in London with contributions from our correspondents around the world. All times GMT.

18.58 That’s about it for the live blog today. Follow FT.com through the evening for all the news from the summit and analysis of the day’s developments. Before we go, a quick recap:

  • Eurozone finance ministers held back more than half of Greece’s €130bn bail-out on the grounds that Athens has yet to jump through all the hoops lined up by its international creditors. That money could be released as soon as next week, though, and the ministers did sign off on a package of incentives and instruments to underpin a debt restructuring deal with private investors in Greek bonds
  • ISDA, the industry body that decides what is and is not a “credit event”, ruled that the Greek debt restructuring does not constitute one – or not yet, at any rate. That means that $3.25bn of credit default swaps on Greek government bonds do not pay out – unless ISDA comes to a different view at a later date. The decision could have significant knock-on effects in the market for CDS, which serve as insurance against a sovereign default.
  • There was more fallout from the Irish plan to hold a referendum on the eurozone’s fiscal compact, following the resignation of Fianna Fail’s deputy leader – and an apparent threat to execute a kitten (see 15.22)
  • Unemployment in the 17-member eurozone jumped to an all-time high of 10.7 per cent in January, new data showed
  • Spain held another successful bond auction and Italian yields fell too

And we leave you with a little light reading on the travails of Greece and one line — perhaps unfair, given today’s progress — that’s been raising wry smiles on Twitter.

[blackbirdpie url="https://twitter.com/#!/sickipediabot/status/169089627783827457"]

18.55 As expected, Herman Van Rompuy is elected for another term as president of the European Council.

[blackbirdpie url="https://twitter.com/#!/euHvR/status/175291547821158401"]

18.18 Now the finance ministers have done their work — well, some of it — it’s over the Europe’s leaders for the summit proper. Once again, all lenses on Germany’s Angela Merkel.

Angela Merkel arrives at the EU summit

Angela Merkel arrives at the EU summit in Brussels (Photo: AP)

17.58 Earlier, Bill Gross, the manager of Pimco, the world’s largest bond fund, was to be heard fulminating against ISDA’s decision not to deem the Greek restructuring a “credit event”, thereby preventing credit default swaps from paying out (15.27).

Our hawk-eyed colleagues at FT Alphaville have, however, been studying the list of the ISDA members that voted unanimously against calling a credit event. Check the last name….

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Mario

Still super, Mario?

By Tom Burgis and Esther Bintliff on the news desk in London with contributions from our correspondents around the world. All times GMT.

Another big day for “Super” Mario Draghi, the European Central Bank president. 800 banks borrowed a total of €529bn under the ECB’s liquidity programme — more than last time. We were watching too for ripples from Dublin’s decision to hold a referendum on the eurozone fiscal pact.

19.20: We’re going to wrap up the live blog for today, so here’s a final round-up of today’s events:

  • In round two of the European Central Bank’s Long-Term Refinancing Operation (or LTRO), 800 European banks borrowed €529.5bn
  • A larger number of banks borrowed money than last time (when 523 banks borrowed €489bn)
  • About €310bn of net new liquidity was added to the system
  • More than two thirds of the volume was taken up by banks in three countries, thought to be Spain, Italy and France. Among the biggest takers of funds was Italy’s Intesa SanPaolo, with €24bn, double the amount it took in the December operation. UK bank Lloyds is believed to have been the biggest non-eurozone taker of funds, receiving €11.4bn.
  • In the markets, risk assets were initially firm on the back of the LTRO figures, but later fell back as Fed chairman Ben Bernanke spoke to Congress and dampened speculation that further monetary easing was on its way
  • On the plus side, US growth data for the fourth quarter was revised upwards, from 2.8 per cent to 3 per cent
  • The FT’s Brussels bureau chief Peter Spiegel got a copy of the draft conclusions from the EU council summit that begins tomorrow
  • EU Commission president Barroso met with Greek prime minister Lucas Papademos – see our 17.58 update

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Euro banknotes placed on a map of Greece. Photo: Dado Ruvic, Reuters

Dado Ruvic, Reuters

Welcome to our continuing coverage of the eurozone crisis.

All times GMT. By Tom Burgis and Esther Bintliff in London, and Anjli Raval in New York, with contributions from FT correspondents around the world.

23.13 European finance chiefs deferred ratifying a rescue package for Greece, pressing the government in Athens to put a newly struck austerity plan into action. Here are some closing remarks after talks this evening where no final decision on the deal was made:

  • Greece is in “the middle of the road,” and much work remains on its recovery, the country’s prime minister Lucas Papademos said in a statement.
  • Greece must pass its latest austerity package into law and identify €325m  in spending cuts before euro-area governments endorse a second bailout for the country, Luxembourg prime minister Jean-Claude Juncker said after chairing the emergency meeting of euro-area finance ministers. “Despite the important progress achieved over the last days we didn’t yet have all necessary elements on the table to take decisions today,” he said.
  • Christine Lagarde, IMF managing director said: ”There is clearly some very encouraging news coming out of Athens and … after the very heavy duty work that has been done lately, I think it’s positive.”

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Welcome to the second day of our rolling coverage of the eurozone crisis. All times are London time. Curated by Esther Bintliff and John Aglionby on the world news desk in London, with contributions from FT correspondents around the world.

20.00: We’re wrapping up the blog for today but we’ll be back bright and early tomorrow. In the meantime, you can follow the rest of our coverage at ft.com/world

19.52: BREAKING The FT’s Peter Spiegel and Quentin Peel report that a split has opened in the eurozone over the terms of Greece’s second €109bn bail-out with as many as seven of the bloc’s 17 members arguing for private creditors to swallow a bigger write-down on their Greek bond holdings, according to senior European officials.

The divisions have emerged amid mounting concerns that Athens’ funding needs are much bigger than estimated just two months ago. They threaten to unpick a painfully negotiated deal reached with private sector bond holders in July.

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As fears of a possible Greek default continue to sway financial markets, time is running short for policymakers to agree a solution to the eurozone crisis. The FT will be running live coverage of the latest developments here on our foreign affairs blog, The World.

All times are London time. Curated by Esther Bintliff, assistant Europe news editor in London, with contributions from FT correspondents around the world.

19.30: We’re wrapping up the blog for today, but we’ll be back on Tuesday to cover the latest developments from Greece – where a parliamentary vote is due to take place on the unpopular new property tax – and Germany, where the Greek prime minister is due to meet with chancellor Angela Merkel. In the meantime, please follow the rest of our coverage at ft.com/world

19.18: There was a teensy bit of good news today – or not so bad news. German business confidence, as measured by the Munich-based Ifo institute, fell in September – but by far less than in August. That counts as a positive in these turbulent times…

19.10: The European Central Bank is likely to significantly extend its provision of liquidity to banks next week as it seeks to counter the escalating eurozone debt crisis, reports Ralph Atkins, our Frankfurt bureau chief. But he says it’s still an open question whether the ECB will cut official interest rates as well.

18.55: Donal O’Mahony, global strategist at Davy Capital Markets, points out that the “current convulsions in global markets and economies offer some depressing comparisons to the events of 2008″:

“Once again, nerves are being shredded by the perception of bank solvency and liquidity risks, albeit this time with balance-sheet concerns more focussed on “toxic” sovereign than credit exposures… Once again, the spectre of another calamitous debt default now hangs heavily in the air.”

O’Mahony argues that while the eurozone’s crisis resolution efforts have thus far been hampered by “deep ideological conflicts”, a “more decisive policy approach may finally prevail”, given the dangerously high stakes: namely, the “entire fate of the single currency ideal hanging in the balance”.

18.40: Moves to save the euro have come and gone but it now looks like policymakers recognise the urgency of addressing the problems underlying the eurozone structure. In this video, Lex’s Vincent Boland and Nikki Tait discuss what needs to be done and whether we’ve reached a turning point.

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