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Alert, Alert MAJOR Euro-land Bank about to go!

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  • Alert, Alert MAJOR Euro-land Bank about to go!

    http://www.weeklystandard.com/Conten...5/636zbhel.asp

    Mike

  • #2
    Re: Alert, Alert MAJOR Euro-land Bank about to go!

    Mega:

    Sounds a little squirrely to me! I've read Fortis is in trouble....but what large bank isn't? The CB's won't let Fortis go down. I think all the major WS banks should get what's coming to 'em. Let 'em go!
    RanMan :cool:

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    • #3
      Re: Alert, Alert MAJOR Euro-land Bank about to go!

      Originally posted by GeraldRiggs View Post
      Mega:

      Sounds a little squirrely to me! I've read Fortis is in trouble....but what large bank isn't? The CB's won't let Fortis go down. I think all the major WS banks should get what's coming to 'em. Let 'em go!
      Agreed, but what SHOULD happen and what WILL happen are two very different things.

      Comment


      • #4
        Re: Alert, Alert MAJOR Euro-land Bank about to go!

        So it begins:

        Fortis faces rescue by state

        By Peter Thal Larsen in London, Tony Barber in Brussels and Michael Steen in Amsterdam



        A state-sponsored rescue of Fortis was under way Sunday night as ministers and central bankers in Belgium and the Netherlands scrambled to shore up confidence in the embattled banking and insurance group.
        Following a weekend of intense negotiations, policymakers were Sunday night leaning towards a partial nationalisation of Fortis by the Belgian, Dutch and Luxembourg governments.



        The prospect of a sale of all or part of Fortis to BNP Paribas of France or ING of the Netherlands was receding, although bankers said it remained a possibility. A final plan is expected before the markets open Monday .
        Fortis, a giant of the Belgian and Dutch financial landscape, has become the latest focus of investor fears about the stability of Europe’s financial sector following the recent ructions on Wall Street.
        Last Friday Fortis announced plans to speed up an €10bn disposal programme and announced the appointment of Filip Dierckx as chief executive – its second new chief executive in three months. However, bankers said the extent of the loss of confidence in Fortis meant a more far-reaching solution was required.
        Wouter Bos, Dutch finance minister, and Nout Wellink, president of the Dutch central bank, travelled to Brussels for talks with their Belgian counterparts Sunday afternoon. Meanwhile Jean-Claude Trichet, European Central Bank president, was in Brussels to meet Belgium’s prime minister, Yves Leterme.
        Fortis is by far the largest European financial institution to be hit by a crisis of confidence of the kind that has undermined several US banks. The turmoil has raised far-reaching questions about the ability of European governments to co-ordinate the rescue of an institution whose assets are several times the size of Belgium’s gross domestic product. Failure to shore up Fortis could prompt a broader loss of confidence in other European financial institutions.
        One option under discussion by ministers on Sunday night was for the Belgian, Dutch and Luxembourg governments to buy stakes in Fortis in order to boost its capital reserves, which have been stretched by its role in last year’s €71bn break-up bid for ABN Amro, the Dutch bank.
        Fortis is scheduled to take full ownership of ABN’s private banking and Dutch retail banking arms next year, but questions about its ability to finance the purchase have contributed to its woes. ING, which held talks with ABN early last year but dropped out, was the most obvious buyer of Fortis’s stake in ABN.
        BNP was mainly interested in Fortis’s Belgian operations. However, BNP was wary of assets on Fortis’s balance sheet, most notably its portfolio of mortgage-backed securities, and sought government guarantees for a full takeover. Such a move would be politically controversial, and bankers on Sunday night said the Belgian government was likely to favour temporarily taking Fortis into state ownership rather than supporting a foreign takeover.
        Belgium is desperate to prevent a panic because Fortis is the country’s biggest private sector employer and handles the bank accounts and insurance policies of 1.5m Belgian households, or almost half the population.
        Fortis has been under intense scrutiny since the bank surprised investors in June by announcing plans to raise €8bn through a share issue and the sale of some assets. The move, which led to the departure of Jean-Paul Votron as Fortis chief executive, triggered a storm of protest from shareholders who had helped to finance the bank’s €24bn share of the ABN deal. It also undermined the credibility of Fortis’s management team. Last week, a sharp drop in its share price forced the bank to deny rumours that it was facing a liquidity shortage.

        Comment


        • #5
          Re: Alert, Alert MAJOR Euro-land Bank about to go!

          ..................and to think this is just Sub-prime................got Alt "A" to come ;)
          Mike

          Comment


          • #6
            Re: Alert, Alert MAJOR Euro-land Bank about to go!

            Originally posted by Mega View Post
            ..................and to think this is just Sub-prime................got Alt "A" to come ;)
            Mike

            Actually Mike, I believe that these markets are already pricing in Alt-A because nothing is selling and none of these junk CDO's have much value left. Essentially, the world markets now know our banks are peddling turds! If anything, my fear is that Bernacke has been instructed by his bosses to get their 700billion back from our politicians and then...JUST WALK AWAY! Just like any sane sub-prime or Alt-A homeowner should. :rolleyes:

            Comment


            • #7
              Re: Alert, Alert MAJOR Euro-land Bank about to go!

              securitization is not nearly the bugbear in europe that it is in the US.

              see ECB FSR on this.

              Comment


              • #8
                Confirmed

                Huge European bank fails

                European financial giant Fortis partially nationalized. Three governments to pour 11.2 billion euro ($16.4 billion) into the bank.

                BRUSSELS, Belgium (AP) -- Dutch-Belgian bank and insurance giant Fortis NV was given a 11.2 billion euro ($16.4 billion) lifeline to avert insolvency as part of a wider bailout plan agreed to by Belgium, the Netherlands and Luxembourg, officials said Sunday.

                Belgium's Prime Minister Yves Leterme said the bailout shows account holders and investors that Fortis will not be allowed to fall victim to the global credit crisis.

                Leterme announced the deal after weekend talks between the three countries, European Union and national banking officials.

                The deal will force the bank -- which has headquarters in both Brussels and the Dutch city of Utrecht -- to sell its stake in Dutch bank ABN Amro, which it partially took over last year. Fortis paid 24 billion euros for its share of ABN.

                etc...

                Comment


                • #9
                  Re: Confirmed

                  Originally posted by metalman View Post
                  Huge European bank fails

                  European financial giant Fortis partially nationalized. Three governments to pour 11.2 billion euro ($16.4 billion) into the bank.

                  BRUSSELS, Belgium (AP) -- Dutch-Belgian bank and insurance giant Fortis NV was given a 11.2 billion euro ($16.4 billion) lifeline to avert insolvency as part of a wider bailout plan agreed to by Belgium, the Netherlands and Luxembourg, officials said Sunday.

                  Belgium's Prime Minister Yves Leterme said the bailout shows account holders and investors that Fortis will not be allowed to fall victim to the global credit crisis.

                  Leterme announced the deal after weekend talks between the three countries, European Union and national banking officials.

                  The deal will force the bank -- which has headquarters in both Brussels and the Dutch city of Utrecht -- to sell its stake in Dutch bank ABN Amro, which it partially took over last year. Fortis paid 24 billion euros for its share of ABN.

                  etc...

                  This one should go in the "When you're hot, you're hot, and when you're not, you're not" file:
                • guardian.co.uk, Wednesday 24 December 2008 08.57 GMT
                  Fortis, the troubled Belgian bank whose future has been clouded by a top-level political crisis, has admitted losing almost €300m (£280m) after an ill-fated move into sterling and the US dollar.


                  The loss, which makes a significant dent in Fortis's remaining cash reserves, was incurred following the suspension of its proposed takeover by France's BNP Paribas.


                  Fortis said this morning that it had bought undisclosed amounts of both currencies on 8 December, in preparation for the merger with BNP. The deal was hit by a legal challenge four days later and the subsequent collapse of the Belgian government.


                  The pound and the dollar have since slid in value versus the euro, and it appears that Fortis did not take the precaution of hedging the transaction.


                  "Given the current uncertainty, Fortis decided to sell the US dollars and pounds sterling again, resulting in a net loss for Fortis of €295m. This loss reflects the recent devaluation of the US dollar and the pound sterling," it said today.


                  The loss cuts Fortis's net cash reserves down from €2.1bn to €1.8bn. Shares in the bank fell by almost 10% following the admission...

                Comment


                • #10
                  Re: Confirmed

                  Originally posted by GRG55 View Post
                  This one should go in the "When you're hot, you're hot, and when you're not, you're not" file:
                • Graeme Wearden
                • guardian.co.uk, Wednesday 24 December 2008 08.57 GMT
                  Fortis, the troubled Belgian bank whose future has been clouded by a top-level political crisis, has admitted losing almost €300m (£280m) after an ill-fated move into sterling and the US dollar.


                  The loss, which makes a significant dent in Fortis's remaining cash reserves, was incurred following the suspension of its proposed takeover by France's BNP Paribas.


                  Fortis said this morning that it had bought undisclosed amounts of both currencies on 8 December, in preparation for the merger with BNP. The deal was hit by a legal challenge four days later and the subsequent collapse of the Belgian government.


                  The pound and the dollar have since slid in value versus the euro, and it appears that Fortis did not take the precaution of hedging the transaction.


                  "Given the current uncertainty, Fortis decided to sell the US dollars and pounds sterling again, resulting in a net loss for Fortis of €295m. This loss reflects the recent devaluation of the US dollar and the pound sterling," it said today.


                  The loss cuts Fortis's net cash reserves down from €2.1bn to €1.8bn. Shares in the bank fell by almost 10% following the admission...

                • No, No, Much more importantly, this decision to sell must also signal that they feel the ongoing value of the US dollar and the pound is sufficiently negative and long term to make it necessary to sell immediately to stem the ongoing losses. That they could see no sign of a change in the downward pressure.

                  Comment


                • #11
                  Re: Alert, Alert MAJOR Euro-land Bank about to go!

                  Originally posted by phirang View Post
                  securitization is not nearly the bugbear in europe that it is in the US.

                  see ECB FSR on this.
                  When we first interviewed CDO firm Dynamic Credit CEO Jim Finkel in Jan. 2007 he explained to us that he learned how to create CDOs for a European bank in the early 1990s. They've been at it a lot longer than the US banks have.

                  Jim Finkel, CEO of Dynamic Credit Partners, Follow-up Parts I & II
                  Ed.

                  Comment


                  • #12
                    Re: Alert, Alert MAJOR Euro-land Bank about to go!

                    Fred, Das wrote in this book that the first CDOs were created in 1987 at Drexel Burnham under Milken.

                    Comment


                    • #13
                      Re: Alert, Alert MAJOR Euro-land Bank about to go!

                      That's an interesting story, made more interesting by who's telling it. Bill Kristol is best (as it were) known as a neoconservative political commentator. And here he is asking for another slurp from the nanny-state...delivery organ. It makes me wonder whose ox is being gored.

                      Comment

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