No Agreement on Risk sharing in EU - Investment Hse According to a research team from NY, “The recent situation with the EU government is more complicated when it comes to the SRM and the deposit guarantee.” At the core of the discussion is how Euro area countries should share the risk involved in making these two pillars of the Banking Union operational. Given the (potentially significant) inter-country transfers that could result, we expect negotiations to remain difficult, in particular in relation to the common deposit guarantee. A well-designed Banking Union would clearly improve the institutional set-up of the Euro area. But we do not view it as either a necessary or sufficient condition to overcome the current crisis. “In our view, Banking Union is not the only way to break the vicious circle between banks and sovereigns. We see no reason why the benefits of the SSM cannot be reaped without the other two pillars being in place.” the team adds. Indeed, the ECB’s announcement of the OMT has proved sufficient to turn the ‘vicious circle’ into a ‘virtuous’ one. That said, the OMT places the ECB in a difficult position, given the sensitivities surrounding ECB asset purchases. Achieving Banking Union could relieve the ECB of the responsibility to backstop the banking system via the OMT and national governments, allowing it to refocus on its original narrower role. ++++++++++++++++++++++++++++++++++++ Big Bern to Serve a 3rd Term - German bank (NY) With regards to the Fed, the Obama administration is currently compiling a shortlist of candidates to succeed Bernanke when his term ends in January, analysts. Names being discussed in the media include current Vice Chair Janet Yellen and former treasury secretaries Larry Summers and Tim Geithner. While there is no front-runner candidate, Obama could try and persuade Bernanke to serve a 3rd four-year term. Past Fed chair nominations have tended to be made anywhere between June and October. ++++++++++++++++++++++++++++++++++++ Bullion - The ratio turns lower, 15:15 GMT London 28/06/2013 - The drop in the gold/silver ratio to 62.7 from a recent high at 66.4 may well signal the end of the rout in bullion, at least for a while. The run-up in silver suggests that bargain hunting is emerging after a long and drawn-out sell-off. We have often noticed that when investment money starts to flow into bullion it often starts off in silver, which is seen as a cheaper proxy for gold, and then flows into gold. As the chart shows, the shift in the ratio has been severe - and although the ratio is still high, we feel that the move bodes well for bullion if is not a one-day wonder. It may be that all we are seeing is end-of-quarter book-squaring and profit-taking (short-covering) but again, with gold and silver looking oversold, a short-covering rally may have some distance to go. Looking at the silver about 15 min charts you can see four spikes
Posted on: Sat, 29 Jun 2013 05:15:22 +0000
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