THURSDAY, JANUARY 06, 2011
EU Proposes Bank Failure Plan, European Bond Spreads Increase (Calculated Risk)
by CalculatedRisk on 1/06/2011 02:03:00 PM
From the WSJ: EU Proposes Plan for Bank Failure
The EU executive arm, the European Commission, Thursday released a hefty 100-plus page consultation paper open to public comments until March 3, which aims to abolish the excuse that a bank is too big to fail. It asks whether bank bond holders should share in paying for future bailouts ...Here is a look at European bond spreads from the Atlanta Fed weekly Financial Highlights released today (graph as of Jan 4th):
[A] diplomat added: "The overriding objective is to make sure creditors bear the appropriate share of losses of a failing bank and these aren't immediately passed along to taxpayers."
Click on graph for larger image in new window.From the Atlanta Fed:
Greek, Irish, and Portuguese bond spreads (over German bonds) continue to be elevated, rising since the December FOMC meeting.READ FULL POST HERE
Since the December FOMC meeting, the 10-year Greek-to-German bond spread has widend by 105 basis points (bps) (from 8.85% to 9.90%) through January 4.
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