It looks like you're using an Ad Blocker.
Please white-list or disable AboveTopSecret.com in your ad-blocking tool.
Some features of ATS will be disabled while you continue to use an ad-blocker.
AUSTRALIA Post will pay $408 million to buy Qantas out of freight group StarTrack Express as the postal giant moves to cash in on an explosion in parcel volumes.
#16 According to a recent IMF report, European banks may need to sell off 4.5 trillion dollars in assets over the next 14 months in order to meet strict new capital requirements.
Although some deleveraging is both inevitable
and desirable, its precise impact depends on the
nature, pace, and scale of asset shedding. The EBA
explicitly discouraged banks from shedding assets
to meet the 9 percent capital target, by requiring
that banks cover the shortfall mainly through capital
Asset sales would be recognized toward
achievement of the EBA target only if they do not
lead to a reduced flow of lending to the economy. So
far, deleveraging has occurred predominantly through
buttressing capital positions and reducing noncore
activities, leaving the impact on the rest of the world
It is essential to continue to avoid a
synchronized, large-scale, and aggressive trimming of
balance sheets that could do serious damage to asset
prices, credit supply, and economic activity in Europe
Under the scenario of current policies, systemic
risks are averted but strains remain, as policymakers
do not capitalize on recent progress to secure further
breakthroughs in the areas of national reforms,
bank restructuring, and further financial and fiscal
integration needed to entrench stability.
Consistent with that notion, current forward markets suggest
that spreads will persist at relatively elevated
levels for weaker sovereigns and banks. Still-fragile
confidence implies that foreign investors will not
increase their exposures to peripheral bonds, causing
the dependence on home institutions to rise.
Weak Policies Scenario
In a more adverse scenario of weak policies, conditions
could deteriorate to the point of reviving
acute market tension. This scenario could be triggered
because the implementation of the policies
under the current policies falls short of what has
been agreed, national policies falter, political solidarity
underpinning euro area reforms fragments,
or shocks overwhelm the firewalls.
Under this scenario, credit spreads rise sharply again, pushing
several sovereigns toward a bad equilibrium of
prohibitive funding costs, worsening debt dynamics,
and risks of illiquidity or financial repression.
Further stresses in the banking system could force
banks to accelerate the deleveraging drive. As a
result, EU banks could shed an additional $1.2 trillion
in assets above the baseline by end-2013, or a
further 3 percent of assets.