The leaders of the European Union have agreed to a deal that would allow bailout funds to go directly to struggling banks instead of the governments of member nations.
They also created a joint banking supervisory board after meeting for 13 hours. Continue reading
Moody’s marked down several major banks including Citigroup and Bank of America in the United States and Royal Bank of Scotland, Barclays and HSBC in the United Kingdom. Lloyds of London also had their ratings cut.
In addition to Citigroup and Bank of America, Morgan Stanley, JP Morgan Chase and Goldman Sachs were issued downgrades. Continue reading
Luis deGuindos, Spain’s economy minister, stated today that the country is on the verge of asking for a bailout as reported in various media sources.
Any decision on a bailout request would be dependent on the outcome of audits of all Spanish banks. The results of the audit are not expected until the end of June. Continue reading
Three Spanish savings banks are considering a merger to try and strengthen themselves against the amplifying debt crisis in the country.
The three boards of each bank are meeting today to determine the fate of the merger.
The merger comes amid news that investors are fleeing the Spanish markets as the bond yields for Spanish bonds rose to an all time high. Investors appear to be running to Germany as an influx of investment capital drove the German bond yields significantly lower. Continue reading
Markets across Europe were rocked this morning after more bad economic news for banks in Spain.
Late Thursday credit agency Moody’s cut the credit ratings of sixteen Spanish banks. Moody’s also cut the credit rating of Santander UK, the British subsidiary of Spanish banking giant Santander.
Moody’s stated reasons for the downgrade included Spain’s return to a recession, bad loans in the property industry and financial challenges for the government. Continue reading