Temat: Przeglad Prasy Swiatowej

WED 22 Jun

Fed downgrades economic assessment, sees pickup


(Reuters) - The Federal Reserve on Wednesday said the pace of economic recovery was proceeding more slowly than it had expected, but it expressed hope growth would pick up soon.

It also pinned a quickening of inflation largely on temporary factors, including higher commodity prices and supply chain disruptions from Japan's devastating earthquake.

The central bank said the forces pushing up prices should dissipate, allowing inflation to subside to levels consistent with price stability, even as growth revives.

"The slower pace of recovery reflects in part factors that are likely to be temporary, including the damping effect of higher food and energy prices on consumer purchasing power and spending as well as supply-chain disruptions associated with the tragic events in Japan," the Fed said in a statement at the conclusion of a two-day meeting.

As widely expected, the Fed said it will maintain interest rates at exceptionally low levels for an extended period. It also confirmed it was ending its $600 billion bond-buying program at the end of the month, while reiterating that it will continue to reinvest principal payments from its holdings.

The Fed downgraded its view of the labor market, saying it had been "weaker than anticipated." That contrasted with the statement after its last meeting in April when it said the job market was "improving gradually."

U.S. stocks dipped after the Fed's statement was released, while prices for U.S. government bonds slipped and the dollar edged higher against the euro.

"The Fed statement did not offer any real surprises, but it did confirm the job situation is much weaker than was expected," said Daniel Penrod, senior industry analyst at the California Credit Union League in Ontario, California.

"The likelihood is that because of the weakness in the jobs sector, rates are going to stay low."

LONG CRAWL BACK

Two years after the end of the U.S. recession and unprecedented attempts by the Fed to boost growth, the recovery looks disappointingly weak.

While Fed officials have persistently said they expect growth to accelerate, reports since the Fed's April meeting point to a clear loss of momentum in the world's largest economy.

Employers have been reluctant to hire and the jobless rate remains stubbornly high, climbing to 9.1 percent in May. Housing -- a central component of most U.S. families' wealth -- remains mired in a deep slump.

With jobs uncertain and home values falling, consumer spending, which makes up around 70 percent of U.S. GDP, has lagged. Retail sales declined in May for the first time in 11 months.

Factory activity has been sluggish as well.

The economy grew at just a 1.8 percent annualized rate in the first three months of the year. Analysts expect growth in the second quarter to log a rate of around 2 percent, still not sufficient to generate a big uptick in hiring.

The Fed in April forecast the economy would grow between 3.1 percent and 3.3 percent in 2011 and 3.5 percent to 4.2 percent next year. It releases fresh forecasts later on Wednesday.

Even as growth has flagged, inflation has accelerated. Consumers prices posted their biggest year-on-year gain since October 2008 last month, and so-called core prices that exclude food and energy costs have also picked up.

The Fed cut interest rates to near zero in December 2008 and is on track to buy $2.3 trillion worth of longer-term securities by the end of June to stimulate economic growth. The latest buying program -- purchases of $600 billion worth of Treasuries that is dubbed QE2 because it is the second round of what economists call quantitative easing -- ends June 30.

Analysts have in recent weeks speculated the Fed may begin to consider what other tools it has to spur economic growth. Possible steps could include further asset purchases, or a bolstering of promises to markets that easy money policies will be in place until there are clear signs the recovery is taking off.

Temat: Przeglad Prasy Swiatowej

THU 23 Jun

EU leaders to renew battle over Greek crisis at summit

(Reuters) - European leaders will try to convince Greeks and financial markets when they meet on Thursday and Friday that they have a workable plan to help Athens avoid a debt default and return to financial stability.



Using a mixture of arm-twisting and moral support, the leaders will tell Greek Prime Minister George Papandreou that they will release the latest 12 billion euros of an emergency aid package, helping Athens to avoid a potential mid-July default, as long as it commits itself to economic reform.

Greece is not formally on the agenda of the two-day summit -- the fourth this year as the leaders try to get to grips with the crisis consuming Greece, Portugal and Ireland -- but the issue will not escape discussion, diplomats said.

German Chancellor Angela Merkel has underlined that no formal decisions on Greece will be taken at the meeting, but the gathering will be monitored intensely by financial markets for any messages it sends on whether the EU plan can work.

U.S. Federal Reserve Chairman Ben Bernanke stressed on Wednesday that much more than the future of Greece was at stake.

"If there were a failure to resolve that situation, it would pose threats to the European financial system, the global financial system, and to European political unity, I would conjecture, as well," he said.

The summit agenda also involves agreeing to increase the size of the euro zone's current bailout fund, completing the creation of a permanent crisis fund from June 2013, and discussions on Libya, Syria and EU enlargement to Croatia.

"I know that many people in Greece are living through a period of great hardship and uncertainty," European Commission President Jose Manuel Barroso said on Wednesday, adding that he hoped the summit would discuss the issue.

"My message to the Greek people is that, if the government acts, Europe will deliver. If Greece can demonstrate that it is genuinely committed to the reform package agreed with the European Union and the IMF, we will accompany Greece on its journey back to growth."

Papandreou's reshuffled government won a confidence vote in parliament early on Wednesday, clearing one of several hurdles on the path to avoiding a default.

On June 28, parliament will vote on a package of spending cuts, tax increases and privatization measures that Athens has agreed with the EU and IMF. If the steps are approved, euro zone finance ministers will agree to release the 12 billion euros at a meeting on July 3, helping Greece avoid bankruptcy.

Despite calls for all Greeks to show unity in backing the measures, all opposition politicians voted against the government in the confidence vote, and 20,000 protesters chanted insults outside parliament.

"Within the parliament there is no problem at all, the real problem is in society," said Costas Panagopoulos of the polling group ALCO. "There's a lot of disappointment in Greek society, there's a lot of anger -- and there's no hope at all."

Even if Greece manages to persuade the EU and IMF that it is fully committed to making the budget adjustments demanded, this will buy the government only a few months' respite. Discussions are already under way about a possible second package of emergency financial support.

SECOND PACKAGE

Greece agreed a package of 110 billion euros of EU/IMF loans in May 2010, the fifth tranche of which is the pending 12 billion disbursement.

However, it may now need a second bailout of a similar size to meet its financial obligations until the end of 2014, when it hopes to be able to return to financial markets for funding.

Euro zone member states, led by Germany, want any second aid package to include the involvement of the private sector. Specifically, they want Greece's private creditors to agree to roll over their holdings of Greek debt when the bonds mature, keeping Greece solvent while maintaining their exposure.

However, any such move has to be carried out voluntarily. It is unclear how much willingness there is among private sector banks, insurance companies and pension funds to roll over their holdings, which are already deeply discounted.

Credit ratings agencies have said that even a voluntary rollover could be classified as a default, which would have a profound impact on European and global financial markets.

Reflecting the level of concern around the world about Greece's situation, finance officials from the G7 held conference calls on Sunday and Monday to assess progress.

The European Commission made it clear that if Athens could not deliver on promised economic reforms and avoid the threat of default, there was no contingency.

"We have a plan, now it's time to act on it, it's time to implement it. There is no alternative. There is no Plan B," spokeswoman Pia Ahrenkilde-Hansen said.

TALKS ON PRIVATE SECTOR INVOLVEMENT

The medium-term economic reform program agreed between Athens and a team from the EU, IMF and European Central Bank envisages raising 50 billion euros by selling off state firms and includes 6.5 billion in spending cuts and tax rises in 2011.

Even if Greece achieves its targets -- and it has already missed many objectives set by its international lenders -- it will still not be in a position to manage its debts, which already account for 150 percent of gross domestic product.

The long-term solution is restoring economic growth, while dramatically improving productivity, freeing up labor mobility and keeping wages in check, all of which could take years.

Mohamed El-Erian, head of Pimco, the world's biggest bond fund, said he expected Greece to end up defaulting on its debt.

"For the next three years, we're going to see different economies work out different problems. For European economies, especially Greece, it would be through default," he said.

Temat: Przeglad Prasy Swiatowej

THU 23 Jun

David Cameron calls for unity over EU strategy on Greece

(The Telegraph)- David Cameron will today tell EU leaders to "agree a plan and to stick to it" amid fears that Europe's disunited response to the Greek debt crisis will engulf the eurozone and drag down the pound.

The Prime Minister will add his voice to non-euro G7 members who are increasingly concerned that EU dithering over how to deliver a second Greek bailout risks a "spill over" effect into a global economy already weakened by recession.

Britain shares American, Canadian, IMF and European Commission concerns that the public rows between Germany and France on whether the private sector should share the Greek debt burden are dangerous.

"Britain has joined non-EU G7 members in warning that the Euro zone needs to stop fuelling uncertainty by sending different, contradictory messages," said a senior source close to talks in Brussels.

"The euro area needs to decide on a clear plan, agree it and stick to it. There has been too much public speculation of Germany versus France. The eurozone has responsibilities to the wider world economy, especially nearby, close neighbours like Britain."

EU officials have confirmed the British unease at the public disarray shown at an emergency meeting of eurozone finance ministers on Sunday night.

"It might not look it, and Britain is not contributing to the Greek programme, but the British are very active on Greece," said the EU official.

"Britain's economic fate in this difficult time is closely bound up with the euro's fortunes. If we go down then the pound follows quickly. They know that, we know that."

Canada yesterday (WEDS) added its voice to the call from US Treasury Secretary Timothy Geithner for Europe to start speaking with one voice on its sovereign debt crisis.

Jim Flaherty, the Canadian finance minister, said that the G7 would continue to demand regular updates via conference calls with eurozone leaders.

"The concern now is with the situation in Europe, and making sure there's a strong, clear voice in Europe and a clear plan, a clear way forward, so that we do not have this situation of potential contagion in Europe," he said.

Treasury officials have reassured British banks that eurozone plans to "roll over" privately held Greek debt at maturity will be entirely voluntary and will not constitute default.

Brussels sources have suggested that private sector involvement in an expected €120bn second bailout for Greece in July will be more symbolic than substantial, meaning that the euro area's governments will carry the vast bulk of the burden.

"Expectations of private sector involvement have been quietly scaled down. It will be not just a token but it will hardly be what the Germans originally envisaged," said the official.

Commission officials said that there were no plans "yet" to use the European Financial Stabilisation Mechanism (EFSM) for a "successor programme" expected to be set out by EU finance ministers next month.

Britain is exposed to the EFSM to the tune of €1.7bn and some euro zone countries want to raid it to offset the low expected level of private sector involvement.

In the House of Commons, yesterday Mr Cameron was again quizzed on Britain's commitments to Greece and he repeated that Britain would not be involved in a new bailout package.

Andrew George, the Liberal Democrat MP for St Ives told Mr Cameron that Britain could help Greece by returning the Pathenon Marbles to Athens.

Mr George asked Mr Cameron: "Whilst of course we should not be making a unilateral contribution to the Greek bailout, does the prime minister not agree that we have something which would help regenerate the Greek economy and put right a 200-year wrong – and that is to give the marbles back".

Mr Cameron said he had no intention of allowing Britain to "lose its marbles". He added: "The short answer is that we're not going to lose them."

Temat: Przeglad Prasy Swiatowej

THU 23 Jun

EU to pressure Greece amid bank rollover talks

(Reuters) - European Union leaders will pile pressure on Greece at a summit on Thursday to adopt deeply unpopular austerity measures in return for fresh funds to avert a bankruptcy that could shake the global economy.

Euro zone governments are meanwhile arm-twisting banks and insurers to maintain their exposure to Greek sovereign debt when their bonds mature, despite the heightened risk of default, as part of a planned second financial rescue for Athens.

Combining brow-beating and moral support, leaders will tell Greek Prime Minister George Papandreou they will release the next 12 billion euros ($17.2 billion) in emergency aid on July 3, to prevent Athens running out of money in mid-July, provided the Greek parliament adopts key economic reforms next week.

While he has expressed confidence over that vote in public, Slovak Prime Minister Iveta Radicova said Papandreou had voiced doubts in a private telephone call.

"Prime Minister Papandreou has serious doubts about whether the necessary steps will pass in parliament," Radicova told the Slovak parliament's European affairs committee.

Inspectors from the European Commission, European Central Bank and International Monetary Fund met new Greek Finance Minister Evangelos Venizelos in an effort to iron out differences on the bailout program, which he has said he wants to amend to appease an angry Greek public.

"Venizelos will not go to Brussels. He will continue the negotiations with the troika," a lawmaker who took part in a parliamentary committee with the minister told Reuters. "There is a gap of 3.8 billion euros out of the total package of 28 billion euros (in the mid-term fiscal plan) which should be discussed with the troika."

The Greek crisis is set to dominate the fourth EU summit this year as the 27 leaders grope for a solution to the debt woes that have forced Greece, Portugal and Ireland to seek bailouts, diplomats said.

German Chancellor Angela Merkel underlined that no formal decisions on Greece will be taken at the meeting, but the gathering will be monitored intensely by financial markets for any message it sends on whether the EU plan can work.

Investors are skeptical: Five-year credit default swaps on Greek government debt rose 138 basis points to 2,025 bps, according to data monitor Markit, implying a more than 80 percent probability of default over that period.

U.S. Federal Reserve Chairman Ben Bernanke stressed on Wednesday that much more than the future of Greece was at stake.

"If there were a failure to resolve that situation, it would pose threats to the European financial system, the global financial system, and to European political unity, I would conjecture, as well," he said.

The summit agenda also involves appointing Mario Draghi as the next head of the European Central Bank, agreeing to increase the size of the euro zone's current bailout fund, and completing the creation of a permanent crisis fund from June 2013.

STRESS THE POSITIVE

In an attempt to offer positive incentives to Greeks, who have staged mass protests against pay and pension cuts and are resisting privatizations demanded by the EU and IMF, European officials stressed their support for Athens' recovery.

"My message to the Greek people is that, if the government acts, Europe will deliver. If Greece can demonstrate that it is genuinely committed to the reform package ... we will accompany Greece on its journey back to growth," European Commission President Jose Manuel Barroso said on Wednesday.

Papandreou's reshuffled government won a confidence vote in parliament early on Wednesday, clearing one of several hurdles on the path to avoiding a default.



On June 28, parliament will vote on a package of spending cuts, tax increases and privatization measures that Athens has agreed with the EU and IMF. Euro zone finance ministers will review progress on July 3 with a view to releasing the tranche.

Despite EU and IMF calls for Greek political leaders to unite behind the program, all opposition politicians voted against the government in the confidence vote, and 20,000 protesters chanted insults outside parliament.

Even if Greece manages to persuade the EU and IMF that it is fully committed to making the budget adjustments demanded, this will buy the government only a few months' respite and most economists expect it will have to default eventually.

Greece accepted a package of 110 billion euros of EU/IMF loans in May 2010 and now needs a second bailout of a similar size to meet its financial obligations until the end of 2014, when it hopes to return to capital markets for funding.

Euro zone member states, led by Germany, insist any second aid package to include the involvement of the private sector.

At meetings on Wednesday, banks and insurers in Germany, France, Spain and Belgium and possibly other countries were asked by their national central banks to roll over their holdings of Greek debt when the bonds mature, banking and government sources said.

Belgium's De Tijd newspaper said Belgian private bondholders were asked to buy new five-year bonds at the euro zone rescue fund's lending rate upon maturity.

There was no official confirmation of the terms, but a spokeswoman for Franco-Belgian banking group Dexia said it is prepared to roll over its 5.4 billion euro exposure to Greek debt, the biggest among Belgian banks.

Credit ratings agencies have said that even a voluntary rollover would be classified as a default, which would have a profound impact on European and global financial markets.

The medium-term economic reform program agreed by Athens envisages raising 50 billion euros by selling off state firms and includes 6.5 billion in spending cuts and tax rises in 2011.

Even if Greece achieves its targets -- and it has already missed many objectives set by its international lenders -- it will still not be in a position to manage its debts, which already account for 150 percent of gross domestic product.

Temat: Przeglad Prasy Swiatowej

THU 23 Jun

Greece in deal with EU/IMF on austerity plan: sources


(Reuters) - Greece won the consent of international lenders Thursday for a five-year austerity plan intended to avoid looming bankruptcy, sources familiar with the talks said, and its prime minister pledge to push radical economic reforms through parliament.



After a day of wrangling in Athens, new Finance Minister Evangelos Venizelos clinched agreement with EU and IMF inspectors on extra tax rises and spending cuts to plug a 3.8 billion euro funding gap, the sources said.

"We have a deal," one of the sources said as Prime Minister George Papandreou was meeting fellow EU leaders at a Brussels summit dominated by Greece's debt crisis.

There was no immediate official confirmation, but the euro rebounded against the dollar and U.S. stocks pared losses after the Reuters report of the agreement.

European Union leaders insisted that the Greek parliament must enact deep spending cuts, more tax hikes and a major sell-off of state assets to secure desperately needed aid and avoid a potential default in mid-July.

Prime Minister George Papandreou said on arriving at a summit with fellow EU leaders he was committed to pushing the deeply unpopular austerity plan through parliament next week.

"Greece is committed, strongly committed, to continue a very important program for major changes, radical changes, to make our economy viable," he told reporters.

EU leaders also pleaded with conservative Greek opposition leader Antonis Samaras to rally behind the austerity program, but he maintained his refusal to vote for the plan.

Euro zone governments are meanwhile talking to banks and insurance companies to try to convince them voluntarily to maintain their exposure to Greek debt when their bonds mature, as part of a possible second rescue for Athens.

Venizelos, appointed last week, had wanted to change some measures Greece had already agreed with the EU, International Monetary Fund and European Central Bank and present a slightly softer package to parliament for approval on June 28, in an effort to win over an angry and frustrated Greek public.

But the changes meant Athens would have fallen short on its austerity promises, so the gap has been closed by lowering the income tax threshold to 8,000 euros and raise heating oil taxes.

"Our basic aim is to regain our credibility," Venizelos said.

Analysts welcomed the deal. "It helps that Greece is sticking to its austerity plan. Germany, EU and IMF are in active negotiation with Greece which will be stuck to. In general this is good news and it will help," said Perry Piazza, director of investment strategies with Contango Capital Advisors in SanFrancisco.

If the package is approved, the EU and IMF should release a next tranche of emergency loans -- 12 billion euros ($17 bln) -- by mid-July, allowing Athens to escape bankruptcy.

"All conditions must be met," Luxembourg Prime Minister Jean-Claude Juncker told reporters. "If Greece does what it has to do, we will do what we have to do. This is not a threat. It's just a confirmation that we're continuing our efforts."

German Chancellor Angela Merkel, who has taken perhaps the toughest line on Greece, urged the Greek opposition to do what was necessary and get behind the package. "In such a situation, everyone must stand together in a country," she said.

HELP GREECE TO HELP ITSELF

While Papandreou has expressed confidence over the June 28 vote in public, Slovak Prime Minister Iveta Radicova said he had voiced uncertainty in a private telephone call Wednesday.

"Papandreou has serious doubts about whether the necessary steps will pass in parliament," Radicova told the Slovak parliament's European affairs committee.

The Greek crisis dominated debate at the summit, the fourth the EU's 27 leaders have held this year as they grope for a solution to debt woes that have forced Greece, Portugal and Ireland to seek bailouts and roiled global financial markets.

No formal decisions were expected on Greece but the gathering will be monitored intensely by financial markets for any message it sends on whether the EU plan can work. Leaders were expected to agree a statement on Greece during a dinner on Thursday.

But investors are skeptical. Five-year credit default swaps on Greek government debt rose 138 basis points to 2,025 bps, according to data monitor Markit, implying a more than 80 percent probability of default over that period.

U.S. Federal Reserve Chairman Ben Bernanke stressed on Wednesday that much more than the future of Greece was at stake.

"If there were a failure to resolve that situation, it would pose threats to the European financial system, the global financial system, and to European political unity, I would conjecture, as well," he said.

A Greek default would force European banks and governments to take big losses, spread contagion to other stressed euro zone sovereigns and potentially plunge the economy of the world's biggest trading bloc, already slowing, into recession.

GETTING BANKS ON BOARD

Even if Greece manages to persuade the EU and IMF that it is fully committed to making the budget adjustments demanded, it will only buy the government a few months' respite and most economists expect Athens will have to default eventually.

Greece accepted a package of 110 billion euros of EU/IMF loans in May 2010 and now needs a second bailout of a similar size to meet its financial obligations until the end of 2014, when it hopes to return to capital markets for funding.

Euro zone member states, led by Germany, insist any second aid package must involve the private sector. But credit rating agencies have said they would treat even a voluntary debt rollover as a selective default, potentially starting a chain reaction of turmoil in markets.

"We are working on a solution which is based on a voluntary rollover and I expect it will not create a credit event," Rehn said, explaining that part of the aim was to keep discussions on a national level so that voluntary agreement is reached.

At meetings Wednesday, banks and insurers in Germany, France, Spain and Belgium were asked by national financial authorities to roll over their holdings of Greek debt voluntarily when the bonds mature.

A financial source said Franco-Belgian banking group Dexia is prepared to roll over its exposure to Greek debt, the biggest among Belgian banks, adding to the list of banks prepared in principle to take part.

Temat: Przeglad Prasy Swiatowej

THU 23 Jun

Dollar up but report on Greece deal gives euro relief


(Reuters) - The dollar rose against the euro for a second straight session on Thursday but gains were curbed after Greece won consent of a team of European Union-International Monetary Fund inspectors for its new five-year austerity plan.

Greece's agreement came after committing to an additional round of tax rises and spending cuts, sources with knowledge of the talks said.
"We have a deal," said one of the sources.

The dollar, however, still reigned supreme against the euro as fears about global growth had investors rushing to safety following a downgraded outlook from the U.S. Federal Reserve and ongoing uncertainty about a resolution of Greece's debt crisis.

"The Greece news was a near-term excuse to book profits on the euro's sharp decline, but it really does not represent any meaningful improvement in the debt situation," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.

"In addition, there is still the difficult task of getting it approved by Greece's parliament."



Greece's austerity measures, scheduled for a vote on Tuesday, could see rough sailing in parliament, some analysts said.

News of the Greece deal helped the euro pare losses against the Swiss franc after hitting a record low and curb a steep decline against the safe-haven dollar.

In late afternoon New York trading, the euro fell 0.7 percent against the dollar to $1.4256, according to Reuters data, up from a global session low of $1.4125.

"The dollar's strength was a symptom of a risk-off day and not because people think it has medium-term value," said Sara Zervos, senior vice president and global debt team leader at Oppenheimer Funds in New York.

Zervos co-manages $23 billion in assets at Oppenheimer.

"Bernanke was not very inspiring in terms of giving us hope for a bounce in the economy. And the lack of any good news out of Europe also helped fuel a bid for U.S. Treasuries."



On Wednesday, the Fed cut its growth outlook for the U.S. economy for both 2011 and 2012.

On Thursday, U.S. data offered a testament to the Fed's outlook. The number of Americans filing new claims for unemployment benefits rose more than expected last week, while sales of new single-family homes fell for the first time in three months in May.

Adding to the gloomy outlook, private-sector activity slowed in China and Europe this month, according to purchasing managers' indexes. On Thursday, the International Energy Agency said it would release 60 million barrels of oil from strategic stockpiles to help the global economy by pushing down the price of oil. The announcement created little buying for high-yielding currencies.

"Lower oil prices should be euro-negative as it has been energy and food prices driving euro-zone inflation," Commonwealth's Esiner said. The euro was hit earlier by weak euro-zone flash PMI data, which raised concerns over tepid growth outside the core economies of France and Germany.

The single euro-area currency had earlier hit a new trough versus the Swiss franc, falling to 1.18470 francs. The euro was last at 1.19560, down 0.8 percent.

European Central Bank President Jean-Claude Trichet said the warning lights were flashing red on the euro-zone debt crisis, leading some to question whether the ECB will continue with its monetary tightening cycle.

In the end though, Oppenheimer's Zervos said the European Union would come through for Greece.

"No one wants a bank run in Greece, no one wants the financial system to collapse so there would be a lot of regulatory work before any restructuring occurs."

The dollar was last up 0.3 percent at 80.56 yen. The U.S. Dollar Index .DXY, which tracks the greenback against six major currencies, was up 0.7 percent at 75.278, with near-term resistance at its 100-day moving average at 75.630.

Temat: Przeglad Prasy Swiatowej

FRI 24 Jun

Exclusive: Deutsche's firing of top trader sparks probe


(Reuters) - In the fall of 2009, Deutsche Bank quietly fired one of its top derivative traders in London after a colleague in New York complained about finding "substantial trading anomalies" in a multibillion dollar portfolio of high-risk credit default swaps managed by the German-based bank, Reuters has learned.



The bank dismissed Alex Bernand after a quick internal investigation prompted by the employee's complaint led to the discovery of improper trading in one of Bernand's personal brokerage accounts, according to documents seen by Reuters and interviews with people familiar with the situation.

The documents, part of a Sarbanes-Oxley whistleblower action filed against Deutsche in May 2010 by the employee in New York, also reveal that the Securities and Exchange Commission opened an inquiry last year into a related allegation that some of the assets in the derivatives portfolio overseen by Bernand may have been improperly valued in order to hide trading losses.

Deutsche bank spokeswoman Renee Calabro declined to comment on Bernand's dismissal. But she said the allegation that some assets in the bank's derivatives book had been improperly valued was investigated by the bank and is "wholly unfounded."

The SEC investigation and Bernand's October 2009 firing, neither of which has been previously reported, come as Deutsche is aggressively winding down the portion of its derivatives trading business that Bernand had overseen. Earlier this month, the bank reported in an investor presentation that its plan to unwind its "high-risk" credit correlation portfolio "is well ahead" of schedule. The bank first announced a plan to begin "de-risking" some of its derivatives trading desks in late 2008.

In January, Deutsche settled the whistleblower case by agreeing to pay $900,000 to trader Matthew Simpson and promoting him to managing director shortly before he voluntarily agreed to leave the bank in April. It was the largest Sarbanes-Oxley whistleblower settlement for a complaint filed in 2010. Simpson, who now works for Rochdale Securities in Stamford, Connecticut, did not return a phone call seeking comment.

UNFOUNDED ALLEGATION

"This complaint, which is over a year old, has been the subject of a thorough investigation, and we believe that any allegations about financial misreporting are wholly unfounded," said Calabro, who declined to comment on the terms of the settlement with Simpson. "The bank is cooperating with the SEC on its review of the matter."

An SEC spokesman declined to comment.

Bernand, who lives in France, also declined to comment. On his LinkedIn profile, Bernand describes himself as an "independent philanthropy professional."

Simpson's and Bernand's names were redacted from the whistleblower documents seen by Reuters, but their identities were confirmed by two people familiar with the situation.

In its settlement agreement with Simpson, Deutsche also denied "any wrongdoing in connection with the matter." In light of the settlement, the U.S. Department of Labor in February closed its investigation into Simpson's claim that he had been retaliated against by some of his superiors for bringing the allegations of improper trading to the attention of the bank's compliance department.

The firing of Bernand, a one-time rising star in the derivatives world, is something of an embarrassment for Deutsche. In 2006, the bank issued a press release to trumpet his hiring from Bank of America as its global head of credit correlation. At BofA, Bernand had pretty much built the Charlotte, North Carolina-based bank's structured credit trading business from scratch.

Inside Deutsche, the portfolio that Bernand oversaw from London was called the "exotics book," because many of the derivatives in the portfolio were tied to complex securities. At its peak, the portfolio was one of the largest on Wall Street with the assets underlying the trades valued in the tens of billions of dollars.

ILLUSORY PROFITS

The bank's credit correlation desk specialized in using credit default swaps to make proprietary trades that were aimed at hedging some of the bank's exposure to potentially risky corporate bonds, leveraged loans, currencies, indexes and commercial paper. Many of the trades put on by correlation traders involve synthetic collateralized debt obligations (CDOs), financial instruments that use credit default swaps to get exposure to various bonds and other assets.

Some have blamed credit default swaps -- a type of derivative that is supposed to provide a level of insurance against an underlying asset going bad -- with exacerbating the global financial crisis because they increase the level of risk on balance sheets of the world's major banks. However, the synthetic CDOs traded by the correlation desk were not like the more popular variant of CDOs which were stuffed with subprime mortgage securities.

Janet Tavakoli, a Chicago-based derivatives consultant who has written several books on credit derivatives and structured products, said many bank managements did not fully appreciate the illusory nature of the trading profits being generated from derivatives correlation desks before the financial crisis. She said those profits often disappeared and turned into losses when the underlying assets turned south.

"The thing about correlation desks is that it will appear you are making a lot money from trades, but it is all money at risk," said Tavakoli. "I call this kind of trading an invisible hedge fund."

In an early 2010 regulatory filing, Deutsche attributed some of the rise in the bank's value-at-risk, or VAR, at the end of 2009 to a "recalibration of parameters in the Group's credit correlation business."

On Wall Street, VAR is one metric used by a bank to estimate how much money it could conceivably lose in a day if all of its trading bets and hedges went awry. It's an imperfect measurement, but one followed by most industry analysts.

A person familiar with Deutsche said the bank is winding down the credit correlation desk to both reduce its risk profile and better comply with the so-called Volcker Rule's ban on proprietary trading in the United States.

The bank's internal investigation into Simpson's allegations was overseen by the big New York law firm Fried Frank.

The revelation that the SEC is investigating the valuations used for some of Deutsche's derivatives portfolio comes at an awkward time. Over the past few months, the bank has taken some high-profile lumps for its role in contributing to the financial mess.

A Senate report released in April faulted Deutsche for continuing to churn out collateralized debt obligations and other securities backed by subprime mortgages even as the housing market in the United States was starting to crumble. The report from the Senate's Permanent Subcommittee on Investigations said Deutsche aggressively marketed CDOs to its client, "despite the negative views of its most senior CDO trader" about the failing health of the housing market.

Just last month, federal prosecutors in New York filed a civil suit against Deutsche, claiming its MortgageIT subsidiary repeatedly lied about the quality of the mortgages it was issuing to obtain federal guarantees on those iffy home loans. The government seeks to recoup some $1 billion in losses it incurred from insuring the mortgages. Deutsche contends most of the problem loans were issued before the bank acquired MortgageIT in 2007.

Before filing his whistleblower complaint last May, Simpson had built a long track record at Deutsche. Over the dozen years he worked for the bank in New York, he held positions in finance, risk management and then trading. He joined the firm's correlation trading group in 2008 and was responsible for trading derivatives tied to bonds and currencies.

In his whistleblower complaint, Simpson said when he reported his concerns about trading improprieties to Deutsche's compliance department he "expressed concerns for future retaliations."

Among the acts of retaliation that Simpson alleged were being passed over for a promotion in February 2010 and later "stripped" of all his trading and management responsibilities. Calabro said the bank denies Simpson's claim of retaliation.

Temat: Przeglad Prasy Swiatowej

FRI 24 Jun

Asia moves to tap oil reserves


(Reuters) - Asian nations moved to release emergency oil stockpiles on Friday as part of a rare global coordinated action by consumer countries to prevent high energy prices from stunting a stuttering economic recovery.



The move, led by Washington and criticized by the oil industry as an unnecessary distortion of markets, suggests a fundamental shift on the part of industrialized nations toward intervention in commodity markets as an economic policy tool.

Brent oil prices edged back up on Friday after tumbling to a four-month closing low on Thursday, reflecting doubts that the unexpected decision by the International Energy Agency to release 60 million barrels over the next month would have a long-term impact.

Japanese Economics Minister Kaoru Yosano said the move was a warning to speculative buyers but India's Oil Minister S. Jaipal Reddy doubted the action would have an impact.

"Even if there is a slight increase in production (supply), those gains will not be made available to us because of unbridled speculation in the financial markets of the world," he said. "We don't know whether this (weaker oil prices) is a stable trend."

The stock release is only the third in the 37-year history of the agency that was set up as a counter weight to exporting group OPEC.

IEA Asian members Japan and Korea said that from next week they will start releasing oil reserves in line with the agency's targets.

Japan will cut the reserve requirement for oil companies by 7.9 million barrels over the next 30 days and South Korea will release 3.46 million barrels, together providing about 19 percent of the IEA target.

Australia and New Zealand, the remaining members from the Asia-Pacific region, are not participating.

The news follows a Group of 20 agreement, struck in Paris on Thursday, to tackle high food prices by boosting farm output, food market transparency and policy coordination.

The G20 deal is another sign that global policymakers are reaching beyond traditional economic policy tools to sustain global growth.

The world economy, recuperating from the 2008-2009 global financial and economic crisis, has shown signs of losing traction in recent months and the Federal Reserve acknowledged that this week by cutting its forecasts for growth in the world's biggest economy.

High commodity costs that sap consumers' spending power and squeeze manufacturers' profit margins are blamed for much of the slowdown.

SCARCE OPTIONS

Industrialized nations managed to pull their economies from the brink of depression by dishing out trillions of dollars in stimulus packages and slashing borrowing costs to record lows.

But that left rich economies from Japan to the United States with huge debt and few policy options if their economies were to weaken again.

While the release of oil was spearheaded by the United States and other developed nations, booming emerging powerhouses such as China and India are also set to benefit as they try to contain stubbornly high inflation without sacrificing too much growth.

"To some extent, it will help lessen some inflation pressure facing Asian countries and it is also good news for the global economic recovery," said Gong Jialong, former chairman of a body representing China's petroleum industry body.

Gong and others, however, compared the move that will increase daily supply by nearly 2.5 percent to currency market intervention. It is not something that could reverse a broad trend but it could help prevent excessive price moves.

"The hoped-for impact is not to induce a downward trend in commodity markets, but instead to head off potential price increases stemming from the increase in third quarter demand," said PFC, a Washington-based energy consultancy.

Seasonal oil demand ramps up in the third quarter as refineries prepare for the northern hemisphere winter when heating consumption peaks.

Another factor suggesting that the IEA decision will only have a short-term impact on prices is that oil faces an incremental increase in demand now that several countries are turning away from nuclear power generation following Japan's crisis, a Japanese government official said.

"Demand for fuel will rise globally with more countries unable to rely on nuclear power as much as that had initially hopes. That means prices have more reason to rise further than decline," he said. He declined to be identified because he is not authorized to speak to the media.

JPMorgan Chase, however, said that even some cooling effect on prices would prove a boon to the world economy.

"If our projections are realized, the IEA release provides the equivalent of a $140 billion stimulus to consumers," it said in a note. "The release will prove stimulatory to the global economy, particularly for emerging markets and the U.S."

DEEPENING CONSUMER CONCERN

The IEA decision was the culmination of a plan that President Barack Obama put into motion more than a month ago, and shows the deepening concern among rich nations over the economic damage from high energy costs.

Obama drew immediate criticism from the oil industry and Republicans, who called it an ill-timed misuse of stockpiles that risks leaving the government with less ammunition should a deeper supply crisis emerge.

Oil prices have risen 20 percent over the past year, pushing U.S. retail gasoline prices to $4 a gallon.

While Brent crude peaked above $125 in April, it has since fallen sharply. After dropping a further 6 percent on Thursday, prices are only a little higher than mid-February, just before the Libyan conflict began.

The IEA said the action would fill shortages caused by the Libyan conflict and get oil quickly to market while Saudi Arabia makes good on its pledge to pump more oil.

The 28-nation agency will decide whether to release more oil in a month.

The previous two releases followed abrupt shortages caused by the first Gulf War in 1991 and by Hurricane Katrina in 2005, and the global response was swift. In this case, it has been over 3 months since Libya's exports stopped.

The United States will provide 30 million barrels from its huge 727-million barrel crude reserve, about 1.5 days of U.S. consumption, with Europe supplying 30 percent in crude and refined products and the rest from Pacific OECD nations.

Temat: Przeglad Prasy Swiatowej

FRI 24 Jun

Global markets bounce back after Thursday spook

(The Telegraph)- The global market see-saw continued on Friday as Asia bounced back after reassurances from both the Greek prime minister on radical reforms and Chinese Premier Wen Jiabao on inflation concerns.

Markets in Asia rallied as Greece secured the backing of European leaders late last night for its five-year austerity plan, which Greek ministers will vote on next Tuesday.

Britain's benchmark FTSE 100 index is forecast to open up as much as 65 points on the back of the news which sent Asia higher overnight.

The Hang Seng index in Hong Kong climbed 1.8pc as Chinese Premier Wen Jiabao said he was confident that price rises would be kept firmly under control this year.

Confidence in the global recovery was sent reeling on Thursday by a flood of weak economic data that wiped billions off stock markets as investors fled to the safe haven of government bonds.

Poor US employment figures, fresh concerns that Greece may trigger a wider financial crisis, and a slowdown in private-sector activity in China and Europe compounded fears that global growth may be stalling.

"It is difficult to know where to start on a day like today, as the bad news continued to bludgeon already punch-drunk investors," said David Jones, chief market strategist at IG Index.

Britain's blue-chip index lost £26bn as the FTSE 100 shed 98.61 points to close at 5,674.38, its weakest since mid-March, with banks and miners leading the slide. European markets followed suit, ending the day at a three-month low.

On Wall Street, the Dow Jones closed down 59.67 points at 12,050, after making up more than 100 points on late-afternoon reports that Greece may have reached a deal for a new austerity plan.

On currency markets, the pound slumped to its lowest level against the dollar since April 1, falling 1.57 cents to $1.5977 as traders speculated that the Bank of England won't raise rates until the second half of 2012.

The euro dropped to a record low against the Swiss franc at SwF1.1847, while sliding 1.2pc against the dollar to $1.4162.

"This is no longer looking like a small soft patch," said Lawrence Creatura, who manages a stock portfolio at Federated Investors. "It's beginning to look more like quicksand."

The number of US applicants for unemployment benefits rose to 429,000 last week, much higher than economists expected and the largest rise in four weeks. Applicants have been above 400,000 for more than two months, the latest sign that hiring has weakened from earlier this year.

The poor data came the day after Ben Bernanke, chairman of the Federal Reserve, downgraded his forecast for US growth.

Nerves were already on edge before the US jobs data after China reported that its manufacturing output has barely grown in June, suggesting the economy may have slowed significantly in recent weeks. That was followed by euro-zone figures on manufacturing and services, which showed that output had slowed sharply to a 20-month low in June.

The weak data added to scare-mongering comments earlier in the day by Jean-Claude Trichet, President of the European Central Bank, who had warned about contagion from Greece through the European banking system.

In the UK, traders were spooked by the Bank of England's most pessimistic economic outlook in months. Minutes released on Wednesday for this month's rate-setting meeting showed that money-printing is back on the agenda to stave off what the Bank fears could be a looming demand slump.

Those concerns were reinforced by retails sales data from the CBI, which showed that consumers are tightening their belts.

Amid the market rout, investors piled into the relative calm of government debt.

Yields on 10-year gilts fell 4 basis points to 3.149pc – the lowest level since September – as demand soared. US treasuries also saw the yield on 10-year treasuries fall to 2.92pc.

Temat: Przeglad Prasy Swiatowej

FRI 24 Jun

Greece worries put euro on the ropes for 3rd day

(Reuters) - The euro declined against the dollar for a third straight session on Friday, weighed down by concerns Greece's parliament may not pass austerity measures needed for the country to secure more bailout funds from euro zone governments.

Comments from Thomas Robopoulos, a deputy of Greece's ruling PASOK party, saying he will vote against the mix of higher taxes, spending cuts, and state sell-offs roiled the market. His remarks helped send the euro down half a U.S. cent, wiping out initial gains made on the back of a stronger-than-expected German business sentiment survey.

In the United States, stronger-than-expected orders in May for long-lasting goods had minimal impact on trading.

"The market is very jittery today. The economic data is being pushed to the back burner mainly because there is so much uncertainty as to whether the Greek government is going to pass the austerity measures," said Boris Schlossberg, director of FX research at GFT in New York.

Greece's parliament is scheduled to vote on the austerity plan on June 28. An opinion poll on Friday put Greece's conservative opposition -- which has refused to support the plan -- 2.1 points ahead of Prime Minister George Papandreou's PASOK party. It also showed three quarters of Greeks were opposed to the raft of tax hikes and spending cuts that will hit them hard.

A suspension in trade of Italian banking stocks after a 3 percent slump added to worries about the impact of euro zone debt problems on the region's banks.

In early New York trading, the euro fell 0.2 percent on the day to $1.42358. For the week, the euro was down 0.3 percent and about 1.1 percent so far this month.

The euro fell to technical support around $1.41904, its 100-day moving average. Bids were seen around this level, but a close below that was seen as paving the way to more losses.

The euro retreated from a session high of $1.43067 hit after Germany's Ifo think-tank said its business climate index rose to 114.5 in June, beating expectations for a drop to 113.5.

Investors cheered the surprisingly strong Ifo reading, which painted a rosier picture of the German economy compared with a recent run of weak data.

But that euphoria quickly dissipated because of uncertainty about what will happen if Athens is unable to pass radical economic reforms, including tax hikes and spending cuts. The Eurogroup meets on July 3 to decide on a Greek bailout package, which has been made conditional on Athens approving the austerity plan.

"Our strategists continue to expect the program to pass due largely to the fact the Greek government survived the confidence vote ... and voting for the new austerity program is expected to fall largely along similar lines," said Bob Lynch, head of HSBC's G10 FX strategy in New York.

"Nonetheless, the risk for a different outcome is not negligible, and markets will remain sensitive to developments which suggest the program's passage could be in jeopardy."

The euro fell near an all-time low versus the Swiss franc and was last at 1.19110 francs.

The single euro zone currency was also weaker versus the yen, trading down 0.6 percent at 114.20 yen.

Recent signs of dollar funding strains may cap any euro rally against the dollar, with investors watching to see whether European banks' dollar funding demand will increase in currency forwards and cross-currency basis swaps.

Dollar funding costs implied by euro/dollar one-year cross currency basis swaps as well as three-month euro/dollar forwards both rose on Friday, pointing to an increase in dollar funding demand through such instruments.

The dollar index .DXY , which measures its value against a basket of currencies, recovered early losses to trade about flat on the day at 75.475.

Temat: Przeglad Prasy Swiatowej

FRI 24 Jun

Mario Draghi appointed European Central Bank president


( The Telegraph)- EU leaders appointed Italy's Mario Draghi as the next president of the European Central Bank on Friday and another Italian on the ECB's executive board agreed to step down to smooth the process, EU sources said.

In draft conclusions agreed at a summit in Brussels, EU leaders "appointed Mr Mario Draghi president of the European Central Bank from November 1, 2011, to October 31, 2019."

The 63-year-old economist and banker will replace France's Jean-Claude Trichet, who steps down at the end of October after eight years in the eurozone's top monetary policy post.

French officials had expressed concern in recent weeks about Draghi's appointment as it would have meant two Italians being on the ECB's six-member executive board with no French representation. The other Italian, Lorenzo Bini Smaghi, is not due to leave his eight-year post until May 2013.

In April, Italian Prime Minister Silvio Berlusconi promised French President Nicolas Sarkozy that Italy would yield Bini Smaghi's place on the board to a French candidate in return for France's backing of Draghi for president.

But that proved problematic, with Bini Smaghi saying he had absolutely no intention of stepping down early.

EU sources said that Bini Smaghi had assured EU Council President Herman Van Rompuy and Sarkozy in discussions on Friday that he would relinquish his post in the coming weeks.

"We expect an announcement shortly," one senior EU source said. Another said: "This morning, in the Council, Van Rompuy and the Italians will explain that Bini Smaghi will leave in due time."

It is not clear what job Bini Smaghi will move to, but it had been expected that he would become head of the Italian central bank or a similar high-level financial post.

Bini Smaghi was not immediately reachable for comment.

Sources in Frankfurt said the ECB was expected to issue a statement later on Friday.

While Draghi, a highly respected economist and banker, has won widespread backing for his candidacy in recent months, there were concerns earlier in the process that his nationality and past employment with Goldman Sachs could hinder his pathway to Europe's top central banking job.

In appearances before the European Parliament's finance committee, Draghi has made clear that his role at Goldman Sachs between 2002 and 2005 did not involve selling financial instruments but was largely an advisory position.

He has also underlined his experience in overseeing Europe's Financial Stability Board, and emphasised the common thinking he shares with Trichet on monetary policy and on the risks to the financial system of a failure to tackle Greece's debt crisis

Temat: Przeglad Prasy Swiatowej

FRI 24 Jun

Wall St drops as angst over Europe rises

(Reuters) - Stocks dropped on Friday as worries about the Italian banking sector added to anxiety emanating from Europe about passage of a Greek austerity plan, and the S&P 500 once again tested a key technical level.



Italian banks UniCredit SpA (CRDI.MI) and Intesa Sanpaolo (ISP.MI) fell sharply on concerns about their capital positions alongside uncertainty about the euro-zone crisis. Trading in the banks' shares was briefly suspended.

Greece's government faced an electorate vehemently opposed to austerity measures that must be passed in parliament next week to avert default, but progress is being made in persuading banks to take part in a second bailout.

"Essentially they all know they have to help Greece, and that is the biggest thing," said Keith Springer, president of Springer Financial Advisors in Sacramento, California.

"But Greece isn't helping themselves and that is all anybody wants. All they are looking for is for Greece to help themselves a little bit."

The S&P remained within striking distance of its 200-day moving average -- a line the bulls have been able to hold since last September. The level was at 1,263.49.

The Dow Jones industrial average .DJI dropped 77.77 points, or 0.65 percent, to 11,972.23. The Standard & Poor's 500 Index .SPX lost 10.19 points, or 0.79 percent, to 1,273.31. The Nasdaq Composite Index .IXIC declined 24.01 points, or 0.89 percent, to 2,662.74.

Both the KBW Banks Index .BKX lost 1 percent and the S&P Financial Sector Index .GSPF shed 0.8 percent.

On Thursday, the market welcomed Greece's agreement to a five-year austerity plan.

The euro declined against the dollar for a third straight session on worries Greece's parliament might not pass austerity measures needed for the country to secure more bailout funds.

In the latest economic data, new orders for long-lasting U.S. manufactured products, known as durable goods, increased 1.9 percent in May after dropping 2.7 percent in April as bookings for transportation equipment rebounded strongly.

Oracle Corp (ORCL.O), off 3.8 percent at $31.22, was the biggest drag on both the S&P 500 and Nasdaq 100 indexes .NDX a day after the world's No. 3 software maker posted disappointing results, especially in hardware sales, sparking concerns about a bigger slowdown in technology spending.

Micron Technology Inc (MU.O) tumbled 12.5 percent to $7.36

after the memory chipmaker recorded results below expectations late Thursday.

Temat: Przeglad Prasy Swiatowej

FRI 24 Jun

Wall Street sinks on Europe's debt misery


(Reuters) - Wall Street dropped for a third day on Friday on worries about the Italian banking sector and Greece's debt crisis, but the S&P 500 managed to hold its 200-day moving average in a sign buyers still see value.



The Dow industrials and the S&P 500 fell for their seventh week in the last eight. The benchmark S&P 500 is down 7 percent from its 2011 closing high at the end of April.

Investors are fearful that Greece's government may fail to pass an austerity plan next week, which could force a default on its debt repayments. The government faces an electorate vehemently opposed to the austerity measures.

"They (politicians) may not believe that financial markets are as sensitive to their decisions as they actually are, and there is a worry that somewhere along the line, some political vote goes against the market," said Nicholas Colas, chief market strategist of the ConvergEx Group in New York.

The S&P 500 remained within striking distance of its 200-day moving average -- a line that has been tested twice in recent trading and has so far acted as a springboard for stocks. The level was at 1,263.47.

"Every time you test a resistance or support level, you make it weaker," Colas said. "It's almost like a piece of metal. Every time you hit it, it grows more fragile and that's why people are really worried the third or fourth time."

Problems in the euro zone appeared to intensify as shares of Italian banks UniCredit SpA (CRDI.MI) and Intesa Sanpaolo (ISP.MI) fell sharply on concerns about their capital positions. Trading in their shares was briefly suspended.

The CBOE Volatility Index .VIX or VIX, Wall Street's barometer of investor anxiety, rose 9.4 percent to 21.10. Some analysts say fear needs to rise further before the market reaches a bottom.

The Dow Jones industrial average .DJI dropped 115.42 points, or 0.96 percent, to 11,934.58 at the close. The Standard & Poor's 500 Index .SPX fell 15.05 points, or 1.17 percent, to 1,268.45. The Nasdaq Composite Index .IXIC lost 33.86 points, or 1.26 percent, to 2,652.89.

For the week, the Dow fell 0.58 percent and the S&P 500 shed 0.24 percent, while the Nasdaq gained 1.39 percent.

Bank stocks fell on concerns about the economic outlook. The KBW Banks Index .BKX lost 1 percent and the S&P Financial Sector Index .GSPF shed 0.7 percent. The sector has been the worst-performing this year, falling around 8 percent.

On Thursday, the market welcomed Greece's agreement to a five-year austerity plan.

The euro declined against the dollar for a third straight session on worries Greece's parliament might not pass austerity measures needed for the country to secure more bailout funds.

In the latest economic data, new orders for long-lasting U.S. manufactured products, known as durable goods, increased 1.9 percent in May after dropping 2.7 percent in April as bookings for transportation equipment rebounded strongly.

Oracle Corp (ORCL.O) fell 4.1 percent percent to $31.14 .NDX a day after the world's No. 3 software maker posted disappointing results, especially in hardware sales. Oracle's results sparked concerns about a bigger slowdown in technology spending.

Micron Technology Inc (MU.O) tumbled 14.5 percent to $7.21 after the memory chipmaker recorded results below expectations late Thursday.

About 9.26 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq -- well above the daily average so far this year of around 7.57 billion. Analysts said Friday's volume was much higher than average due in part to the rebalancing of the Russell 2000 Index .TOY.

Declining stocks outnumbered advancing ones on the New York Stock Exchange by a ratio of 19 to 11. On the Nasdaq, about three stocks fell for every two that rose.

Temat: Przeglad Prasy Swiatowej

SAT 25 Jun

Greek debt crisis fears trigger flight to safety as euro, markets slide and bond funds see record exodus


(The Telegraph)- The Greek debt crisis pushed the euro and stock markets lower this week as investors pulled money from anything seen vulnerable to a potential default, with high-yield bond funds suffering a record exodus.

Redemptions from European debt funds soared to the highest in nearly three years in the week to June 22, while equity funds focused in Europe or in the financial sector also had large outflows, said fund flow tracker EPFR Global.

"Investors certainly acted as if they had seen the 'red flashing lights' alluded to by the head of the European Central Bank in connection with Greece's debt crisis," EPFR said in a statement.

The euro and global stocks slid on Friday on concerns the Greek parliament may not approve austerity measures next week that are crucial for securing more bailout funds.

The euro dropped against the dollar for a third straight session and hit a record low against the Swiss franc as investors bought safe haven asset. More losses are expected if Greece's parliament doesn't approve a package of austerity measures next week.

Investors pulled a net $5.3bn from high-yield bond funds, their biggest weekly outflow on record, according to EPFR. Investors are jittery after disappointing data from the United States, Europe and China.

Barclays Capital and Fathom Consulting staff have joined the growing chorus of voices warning a restructuring is inevitable for Greece and that an immediate solution would require a massive default on the country's €347bn (£307bn) of debt.

"To achieve 'solvency', Greece needs to write off about 60pc of its debts," said Piero Ghezzi, BarCap's head of economics research.

Once the International Monetary Fund and European Union loans are excluded, and the holdings of domestic banks taken out of the equation, foreign creditors would need to take a 70pc "haircut".

Temat: Przeglad Prasy Swiatowej

SAT 25 Jun

Central bankers agree on bank capital surcharge plan

(Reuters) - Global banking regulators have agreed on a proposal to slap an extra capital charge on the world's biggest banks to make them safer by 2019.

The surcharge is part of a series of regulatory reforms launched in response to the financial crisis, which forced countries worldwide into costly bailouts of their banking sectors to prevent systemic collapses.

The Group of Governors and Heads of Supervision (GHOS) said after a meeting in Basel on Saturday the proposal would be put out to public consultation next month.

"The additional loss absorbency requirements are to be met with progressive common equity tier 1 capital requirement ranging from 1 percent to 2.5 percent, depending on a bank's systemic importance," the group said in a statement.

An additional 1 percent surcharge would also be imposed if a bank becomes significantly bigger, pushing the total to 3.5 percent.

The plans, which need approval from world leaders (G20) in November, would be phased in between January 1 2016 and end of 2018.

The capital surcharge will come on top of the new 7 percent minimum core capital all banks across the world will have to hold under new Basel III rules being phased in over six years from 2013.

However, many of the world's biggest banks already hold core tier 1 capital ratios of 10 percent or more and therefore easily meet or exceed the top end of the surcharge band.

The central bankers have opted for a smaller surcharge than forseen but, in return, the surcharge will have to be in the form of top quality capital -- retained earnings or common equity.

This marks a victory for hardline countries such as Britain and the United States but will disappoint some banks that have been hoping to use hybrid debt such as contingent capital (CoCos) to pad out the surcharge band.

Dirk Jaeger, Managing Director for supervision matters at Germany's banks association BdB said the decision was not much of a surprise: "But we regret that bank levies and CoCo bonds do not count for the additional capital buffer."

COCOS REVIEWED

The proposal, which was due to be finalized by last November but faced opposition from banks and some countries, will apply initially to so-called globally systemically important banks (G-SIBs).

"These measures will strengthen the resilience of G-SIBs and create strong incentives for them to reduce their systemic importance over time," the statement said.

The consultation paper in July will indicate how many banks face a capital surcharge but it is not clear yet if their names will be published.

The number of banks affected is likely to change over time as lenders grow or shrink and the consultation will spell out how often a snapshot of the sector will be taken.

Banks will face a surcharge according to an indicator that draws on five elements -- size, interconnectedness, lack of substitutability, global (cross-jurisdictional) activity, and complexity.

The group of central bankers and the Basel Committee it oversees said they will continue to review the use of contingent capital.

The central bankers said they would support the use of contingent capital to meet higher national requirements than the global minimum surcharge.

However, even then, there would have to be a high-trigger for converting the debt into equity to help absorb losses on a going concern basis, the central bankers said.

Temat: Przeglad Prasy Swiatowej

SAT 25 Jun

Greek ministers appeal to MPs to back austerity plan

(Reuters) - Greek ministers urged wavering members of the ruling Socialist party on Saturday to do their duty in a knife-edge vote in parliament next week and back painful austerity measures that lenders demand as the price for fresh bailout loans.

Finance Minister Evangelos Venizelos offered to talk to any MP who might have concerns. "I believe that the sense of responsibility will ultimately prevail, the God of Greece is great," he said on TV station Alter.

With Prime Minister George Papandreou's majority down to a handful of votes, one deputy from his PASOK party said on Friday he would vote against the measures, joining another party rebel who announced his opposition earlier this month.

The mix of spending cuts, state selloffs and tax hikes demanded by international lenders to reduce Greece's enormous public debt has caused bitter resentment among ordinary Greeks, who have taken to the streets in daily protests.

A two-day general strike is planned next week to coincide with the votes, following a rolling series of strikes at companies including Greece's dominant electricity producer PPC, which is slated for privatisation next year.

Unable to borrow on the markets because of the ruined state of its public finances, Greece depends on international support to avert bankruptcy in the next few days, an event that could plunge the global economy into turmoil.

But international lenders have demanded a clear commitment to reform and if parliament fails to back either of two key austerity votes on June 29 and 30, the EU and the IMF may refuse to release a vital 12-billion euro funding that Greece needs immediately or to approve a new bailout package.

Athens accepted a package of 110 billion euros of EU/IMF loans in May 2010 but now needs a second bailout of a similar size to meet its financial obligations until the end of 2014, when it hopes to return to capital markets for funding.

Justice Minister Miltiadis Papaioannou urged his fellow MPs to back the unpopular measures. "They must shut their ears to all the criticism they are hearing and do their duty," he said in an interview on TV station Mega.

Despite heavy pressure from European leaders including German Chancellor Angela Merkel, the conservative New Democracy opposition party, has refused to support the package, meaning two or three votes either way could decide the outcome.

Papandreou's government now has 155 seats in the 300-strong parliament. Austerity measures have cost the Socialists five defections since their October 2009 election victory with a majority of 160 MPs.

The embattled prime minister last week sacrificed his previous finance minister, George Papaconstantinou, in a reshuffle to smooth the passage of the austerity plan but opinion polls still show him trailing the opposition.

Papandreou's MPs solidly backed the new government in a vote of confidence on Wednesday. But doubters maintain their opposition to higher taxes and the planned sale of shares in some state-controlled companies.

"Shops are shutting down every day and we are taking anti-growth measures," party maverick Thomas Robopoulos, a car dealer from Greece's second city, Thessaloniki, and one of the few businessmen in parliament told Reuters.

Austerity measures have pushed Greece into its deepest recession in 37 years, with GDP declining more than 4 percent last year. Unemployment has surged to a record 16.2 percent in March with youth jobless rates now at 43 percent.

Venizelos acknowledged that many of the measures he agreed with inspectors from the EU and the IMF late on Thursday were unfair and harsh, but said they were necessary to stave off default.

Temat: Przeglad Prasy Swiatowej

SAT 25 Jun

The real cost of the Greek crisis

(The Telegraph)- The turmoil in Greece could spark a second credit crunch, making it harder to find a mortgage, while savers will continue to suffer from rock-bottom interest rates.

The prospect of Greece defaulting on its debt, triggering another European banking crisis, is dominating the news this week. Although we are not in the eurozone, British savers, investors and borrowers aren't immune from the financial problems sweeping the region.

While the economic analysis to date has concentrated on Greece's credit rating, its forthcoming austerity budget and whether it will pull out of the euro altogether, we will focus on how these events will affect British consumers.

On the face of it, this country doesn't appear to be badly affected by Greece's debt problem. The British government, and our banks, have made only modest loans to Greece. Of course, both would prefer this money to be repaid, but they are in a position to absorb the losses if this does not happen.

Of greater concern is if Greece defaults on the more substantial loans made by other European countries and banks – which could cause some of them to run into financial difficulties themselves. Our banks will have far greater exposure to sovereign debt issued by other European countries – in particular debt-stricken Ireland. And of course our banks will loan money to other large European banks.

"Be under no illusion, as far as our finances are concerned we live in a global village," warned Ray Boulger of mortgage broker John Charcol. "Irresponsible lending in America caused a drought of mortgages on the British high street. The collapse of Lehman Brothers, an American investment bank, precipitated the bail-out of RBS and Lloyds. Now a Greek default could cause the banking system to lock up again." Banks, he predicted, may be reluctant to lend to each other, if they don't know which institutions have significant exposure to this bad debt.

Borrowers

This nightmare situation hasn't happened yet. If Greece votes through its austerity budget and secures another bail-out, the crisis is averted – for now. But it's clear that while uncertainty remains about whether it will ever repay its debts, there is unlikely to be any significant easing in the credit markets.

This will continue to affect ordinary borrowers. Melanie Bien, a director of mortgage broker Private Finance, said: "There is no sign of improvement in the credit markets, so lenders' borrowing criteria are likely to remain tight for the foreseeable future."

Worst hit of course will be first-time buyers and those with little equity in their home, who are going to find it difficult to secure an affordable mortgage rate.

Whereas 100pc mortgages were once commonplace, now borrowers need at least a 10pc deposit. Even those who manage to save this much still find they are paying significantly higher interest rates. For example, Co-operative Bank charges 5.89pc for a five-year fix for those borrowing 90pc of the property value. If you only need to borrow 75pc, you can get a five-year fix for 4.29pc from the Yorkshire Building Society.

But it isn't all bad news for borrowers. The unfolding Greek drama means it is less likely that the Bank of England will raise interest rates in the near future, meaning that many home owners with an equity cushion will continue to enjoy low mortgage rates.

Mark Harris of SPF Private Clients explained: "When Lehman Brothers collapsed the Bank of England rapidly reduced interest rates from 5pc to 0.5pc. Earlier this year, there had been speculation that rates might start to rise this spring. Then the consensus was that, with weaker economic growth, it would be later this year. Now, with the turmoil in Greece, most economists don't expect rates to rise until next year at the earliest, and possibly not until 2013."

A number of lenders have already started reducing the cost of their mortgage deals. This week Barclays cut the cost of its new fixed-rate and tracker deals. Andy Gray, the bank's head of mortgages, said this rate cut was due to the turmoil in Greece.

Ms Bien added: "Borrowers may be questioning whether they need to fix their mortgage at this stage. It is also possible that the cost of fixed-rate deals will come down further still, so it may be worth waiting before securing one, particularly if you are enjoying a cheap standard variable rate [SVR]."

Not all home owners are on such competitive deals though. While some lenders, such as Nationwide Building Society and C&G have SVRs of 2.5pc, many building societies are charging between 4.5pc and 6pc. Kent Reliance Building Society has the highest SVR, at 6.08pc – more than 12 times the Bank Rate.

This week Which? accused lenders of penalising these customers, many of whom don't have the option of remortgaging, because they don't have enough equity in their home. More than a fifth of these lenders have increased their SVR while the Bank Rate has remained at 0.5pc.

Whether you are looking to remortgage now will in part depend on whether you are with one of these lenders. For those on a higher SVR, trackers may look a more attractive option, although there is the risk that rates will rise sooner and higher than expected.

The consensus might be that rates won't rise until 2012 – but opinions have shifted quickly before. So those opting for a variable rate should ensure they pick a deal without costly exit fees. First Direct, HSBC, ING Direct and Coventry Building Society all offer competitive tracker deals without early repayment charges. Similarly, Woolwich and Nationwide offer "drop lock" loans – giving home owners the right to switch into a fixed-rate deal at any time.

Savers

What's good news for borrowers inevitably spells further misery for the nation's savers. The chances of savings rates rising in the near future look negligible. At the same time there seems little chance of inflation falling significantly, meaning that the real purchasing power of people's savings will continue to decline.

Inflation at present is being driven by higher commodity prices, in particular energy prices. With Scottish Power announcing an eye-watering 20pc rise in gas prices this summer, and other major utility companies expected to follow suit, inflation does not look like it will be dampened in the near future.

Worryingly, one of the main means of controlling inflation is raising interest rates. But, as stated above, this may not be an option for the Bank of England if there is another banking crisis and economic growth remains sluggish. More alarming still, one of the authorities' main means of unlocking frozen credit markets following the Lehman collapse was quantitative easing – effectively printing more money – which of course can only add to inflationary problems.

For many savers the economic problems in Greece are just the latest act in an ongoing financial tragedy.

Temat: Przeglad Prasy Swiatowej

SAT 25 Jun

Greek ministers urge backing for austerity plan

(Reuters) - Greek ministers and policy makers urged parliament on Saturday to do its duty next week and pass a deeply unpopular set of austerity measures international lenders have demanded as the price for staving off bankruptcy.

With Greece teetering on the edge of defaulting on its huge public debt, Finance Minister Evangelos Venizelos offered to talk to wavering deputies from the ruling Socialist Party, at least two of whom have said they will oppose the measures in crucial votes on Wednesday and Thursday.

"I believe that the sense of responsibility will ultimately prevail, the God of Greece is great," he told TV station Alter.

Without parliamentary approval for the measures, the European Union (EU) and International Monetary Fund (IMF) have said they will not release a vital 12 billion euro ($17.2 billion) loan tranche and the government would run out of cash within days.

On Friday, Prime Minister George Papandreou's already slim majority was further undermined when a deputy from his PASOK party said he would vote against the measures, joining another party rebel who announced his opposition earlier this month.

Papandreou's government has 155 seats in the 300-strong parliament, having seen five defections since it came to power in October 2009 with 160 deputies.

With the economy stuck in its deepest recession since 1974 and youth unemployment running at over 40 percent, the mix of spending cuts, state sell offs and tax hikes demanded by the EU and the IMF has caused bitter resentment among ordinary Greeks.

A two-day general strike is planned next week to coincide with the votes, following a series of protests and rolling strikes at companies including Greece's main electricity group PPC, which is slated for privatization next year.

Athens accepted a package of 110 billion euros of EU/IMF loans in May 2010 but now needs a second bailout of a similar size to meet its financial obligations until the end of 2014, when it hopes to return to capital markets for funding.

In a statement, Venizelos acknowledged the austerity plan was harsh and imperfect and relied too heavily on tax increases but he said it would give the government time to negotiate a new deal with the EU which could include extra stimulus measures.

"The 12 billion euros of the fifth tranche are absolutely necessary to meet the states' cash needs, which is nothing other than the immediate and vital needs of citizens," he said.

CAMPAIGN

On Saturday, government ministers and policymakers including Bank of Greece governor George Provopoulos gave a series of media interviews to hammer home the message that the measures must pass to give the government some breathing space.

Justice Minister Miltiadis Papaioannou urged his fellow MPs to back the unpopular measures. "They must shut their ears to all the criticism they are hearing and do their duty," he said in an interview on TV station Mega.

Ministers also sought to squash the view, expressed by some deputies, that the vital 12 billion tranche may be released even if the measures are not passed because lenders will not want to risk the financial market turmoil that would follow a default.

"Blackmailing Europe would be playing with fire.. we can't negotiate with kamikaze tactics. It's not responsible to threaten that we'll blow up Europe," Deputy Finance Minister Filippos Sachinidis told the daily Eleftherotypia.

Despite heavy pressure from European leaders including German Chancellor Angela Merkel, the conservative New Democracy opposition party has refused to support the package, meaning a handful of votes either way could decide the outcome.

However the Democratic Alliance, a small conservative splinter group with five MPs will decide on how it will vote at the last minute, its leader Dora Bakoyanis told a meeting.

"The stakes are very high, it is a great dilemma," Bakoyanis, said. A former conservative foreign minister, she broke party ranks last year to vote in favor of Greece's first EU/IMF bailout deal but has since criticized the government for bungling its implementation.

Papandreou last week sacrificed his previous finance minister, the unpopular technocrat George Papaconstantinou, in a bid to smooth the passage of the austerity plan but opinion polls still show him trailing the conservative opposition.

On Saturday, a poll by polling agency MARC for newspaper Ethos gave New Democracy leads a 1.4 percentage points lead over PASOK (21.4 pct to 20 pct).

Temat: Przeglad Prasy Swiatowej

SAT 25 Jun

New crackdown on militant unions

(The Telegraph)- Ministers are drawing up plans for a harsh new crackdown on unions to be brought in if this week's strikes over changes to public-sector pensions develop into a full-scale summer of discontent.

The package is likely to include a ban on the use of taxpayers' cash to fund officials who work full-time on union business while nominally employed by government departments, local councils and hospitals.

It could also include new moves to make it harder for unions to call strikes - by insisting on a minimum threshold for turnout in strike ballots before industrial action can be called.

Francis Maude, the Cabinet Office minister, and Vince Cable, the Business Secretary, will take the lead in plans for a crackdown, which have the backing of David Cameron.

The Prime Minister will make a key speech on pensions on Tuesday in which he will set out a strong defence of the government's position - based on the plans for reform drawn up Lord Hutton, the former Labour work and pensions secretary.

A source close to Mr Maude confirmed proposals were being considered but said these would only be used as a "last resort."

Further negotiations between the coalition and unions are planned for Monday.

Thursday is set to be a "day of action" when unions go into battle over government plans to raise the state pension age for public-sector staff to 66 by 2020 as well as to move from the current "gold-plated" pension schemes based on final salary to a new system based on average earnings.

Up to 750,000 teachers and civil servants will go on strike - closing schools and paralysing some government services.

Doctors will next week discuss proposals for taking their own action against pension plans, it can be revealed.

Ministers fear, however, that this will just be the tip of the iceberg, with Dave Prentis, general secretary of the Unison public services union, claiming he is ready to "mount the most sustained campaign of industrial action the country has seen since the general strike of 1926".

The coalition's contingency plans for a fight-back would be likely to be the biggest assault on union power since a range of legislation passed by Margaret Thatcher's government in the 1980s.

No government has ever announced plans to introduce thresholds for strike ballots.

However, Boris Johnson, the London Mayor, believes a strike ballot should have a member participation rate of at least 50 per cent, while the CBI has argued that a strike should go ahead only if 40 per cent or more of those balloted vote for it.

The latest wave of strikes could even see unions grounding Britain's Apache helicopters in Libya and Afghanistan.

Workers at the Army Air Corps base in Wattisham, Suffolk, where the attack helicopters are serviced, will ballot this week for industrial action over pay.

In a speech to Labour Party activists in Wrexham on Saturday Ed Miliband warned unions against going on strike.

He said: “Personally, I don’t think actually strike action is going to help win that argument and I think it inconveniences the public. I think strikes must always be the very last resort.”

Anarchist groups are planning to use Thursday’s strikes as cover to launch attacks on banks, shops and government buildings.

Hundreds of militants are poised to converge on a march in central London, with some calling for a repeat of their rampage which saw West End shop windows smashed and police attacked during a TUC demonstration last March.

Temat: Przeglad Prasy Swiatowej

SUN 26 Jun

No Greek budget cuts, no bailout aid: German Finance Minister

(Reuters) - German finance minister Wolfgang Schaeuble warned that a veto of the Greek government's austerity plans by parliament this week could mean Athens will not receive a bailout tranche it needs to remain solvent.

"If the package is rejected, which no one expects actually, then the prerequisites would no longer exist for the IMF, EU and euro zone countries to release the next tranche of aid," he told German Sunday newspaper Bild am Sonntag.

Athens needs to get its fifth slice of a 110 billion euro ($155.7 billion) EU/IMF bailout worth 12 billion euros, without which the country would be unable to cover pressing funding needs after July 15.

"The stability of the entire euro zone would be in danger and we would need to quickly ensure that the risk of contagion for the financial system and other euro area countries would be contained," he said.

The Greek parliament is due to vote on Wednesday and Thursday on measures that include 6.5 billion euros worth of extra austerity steps for this year and savings of 22 billion euros for 2012-2015 to cut deficits and keep qualifying for EU/IMF aid. It also speeds up the sale of state assets under a 50 billion euro privatization program.

"We are doing everything to prevent the crisis from escalating, but we must be ready for everything. That's our responsibility and we are preparing ourselves for that," he said.

"I am confident that a majority can be found in the Greek parliament for the austerity package," Schaeuble added.

The PASOK part of Greek Prime Minister George Papandreou counts 155 MPs in a 300-strong parliament, but his already razor thin majority may be undermined by two announced defections.

In Bild am Sonntag, Finance Minister Schaeuble also said that he expected private sector creditors to participate willingly in a second bailout package, which is likely to be similar in size to the 110 billion euros of EU/IMF loans from May 2010 and should tide Greece over until the end of 2014.

"Stabilizing the situation in Greece and bringing it under control is really in the absolute interest of all investors. Therefore the private sector doesn't need any additional incentives," Schaeuble said.

German banks, which say they have some 10-20 billion euros in exposure to Greece, have called for the state to guarantee their risk with taxpayer money should they participate in some form of a debt rollover.

Separately, German Sunday weekly Welt am Sonntag reported that German banks were expected to name what kind of maturity extension on Sunday that they are willing to accept.

Welt am Sonntag wrote that as of Friday banks were only offering to grant a one-year extension, instead of the five that the German government wanted.

Speaking to Bild am Sonntag, Schaeuble also said that he was confident his coalition could muster up the votes necessary to approve the creation of the European Stability Mechanism (ESM), the permanent fund to finance euro zone sovereign bailouts that goes into effect in 2013.

"I don't have the slightest doubt that once the summer break is over the treaty over the European Stability Mechanism finds a sufficient majority in the Bundestag and Bundesrat," he said, referring to the upper and lower houses of parliament.