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Economy
In reply to the discussion: STOCK MARKET WATCH -- Thursday, 19 January 2012 [View all]xchrom
(108,903 posts)61. Commerzbank Shortfall 'Bigger Than First Thought'
http://www.spiegel.de/international/germany/0,1518,809819,00.html
The capital shortage at Commerzbank is apparently much larger than previously believed. The major German lender needs around 6 billion ($7.7 billion), daily Die Welt reported on Wednesday. Until now, the European Banking Authority (EBA) regulatory body had estimated the shortfall at 5.3 billion.
But that isn't the only bad news for Commerzbank -- ratings agency Moody's has said it may downgrade the bank's creditworthiness because of its exposure to troubled real estate lender Eurohypo.
According to Die Welt, the need for the extra funds is due to the ongoing negotiations for a debt 'haircut' for Greece. Germany's second-largest bank held Greek bonds worth 1.4 billion at the end of the third quarter last year, even though it had written off 50 percent of them in 2011.
That writedown may no longer be enough, however, as an even higher debt cut has reportedly been proposed in the negotiations between Greece and private creditors.
Such a debt write-off is apparently close to becoming a reality for Commerzbank, which is already working hard to find a solution to its huge capital gap. Banks must report their capital needs identified in stress tests to the EBA this Friday, while Commerzbank must obtain the necessary money by the end of June this year, otherwise it faces compulsory nationalization. The German government already holds 25 percent plus one share of the company.
The capital shortage at Commerzbank is apparently much larger than previously believed. The major German lender needs around 6 billion ($7.7 billion), daily Die Welt reported on Wednesday. Until now, the European Banking Authority (EBA) regulatory body had estimated the shortfall at 5.3 billion.
But that isn't the only bad news for Commerzbank -- ratings agency Moody's has said it may downgrade the bank's creditworthiness because of its exposure to troubled real estate lender Eurohypo.
According to Die Welt, the need for the extra funds is due to the ongoing negotiations for a debt 'haircut' for Greece. Germany's second-largest bank held Greek bonds worth 1.4 billion at the end of the third quarter last year, even though it had written off 50 percent of them in 2011.
That writedown may no longer be enough, however, as an even higher debt cut has reportedly been proposed in the negotiations between Greece and private creditors.
Such a debt write-off is apparently close to becoming a reality for Commerzbank, which is already working hard to find a solution to its huge capital gap. Banks must report their capital needs identified in stress tests to the EBA this Friday, while Commerzbank must obtain the necessary money by the end of June this year, otherwise it faces compulsory nationalization. The German government already holds 25 percent plus one share of the company.
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$10 TRILLION Liquidity Injection Coming? Credit Suisse Hunkers Down Ahead Of The European Endgame
Demeter
Jan 2012
#7
Speaking of the skunk, I just meandered over to Automatic Earth and found this.
Fuddnik
Jan 2012
#18
Yeah. What would be the corresponding statistics for the States? The Skunk, you see,
Ghost Dog
Jan 2012
#19
Well, ZH has a tendency to go way over the top, on occasion. The 'soundbite' is based on
Ghost Dog
Jan 2012
#20
I don't really "understand" any of it, Tansy - but I don't think it matters
bread_and_roses
Jan 2012
#62
Not as far back as our reptile brains. Just a hundred and fifty years of Western social progress,
Ghost Dog
Jan 2012
#65
The A-List: Jeffrey Sachs - Self-interest, without morals, leads to capitalism’s self-destruction
Demeter
Jan 2012
#37
Obama's "tax-policy", the new puppet-in-waiting and the collapsed UBS business model.
Ghost Dog
Jan 2012
#87