More than £5bn was wiped off the value of three of Britain's biggest banks on Monday as global financial markets took fright at the deepening crisis in the eurozone. Stocks fell heavily in Europe and North America while gold rose to a new record of more than $1,600 (£995) an ounce amid concerns that Thursday's emergency summit of EU leaders would once again fail to resolve the debt problems of the single currency's weak members. Officials from eurozone countries were on Monday trying to resolve the row between Angela Merkel and the European Central Bank (ECB) over a possible Greek debt default after a day of turbulence that saw bank shares tumble in late trading. Jean-Claude Trichet, the president of the ECB, is resisting pressure from the German chancellor for Greece's private sector creditors to bear some of the losses of a default, but senior policymakers admitted that it was now vital Thursday's talks in Brussels come up with a credible plan that will restore market confidence after shares, government bonds and commodities all suffered sharp losses. Sources said one option was to convert much of Greece's debts into longer-term bonds, an approach used during the Latin American debt crisis of the 1980s. Lloyds, Royal Bank of Scotland and Barclays were the biggest fallers on the FTSE 100, all losing at least 6% of their value as jittery investors digested the results of Friday's stress tests on European banks, mulled the prospect of the US losing its triple A credit rating and began to worry about the political ramifications of the News International phone hacking scandal for David Cameron. Michael Derks, chief strategist at FxPro, said: "Thus far, the pound has not factored in any real risk premium for political uncertainty. Given the rapidity with which key figures in the scandal are falling on their swords, it could be argued that the pound is being complacent regarding the potential of the hacking issue to ensnare the prime minister and his party."
Access Investments-Building Awareness - European Union-ROMANIA
Tuesday, July 19, 2011
Merkel and more....
More than £5bn was wiped off the value of three of Britain's biggest banks on Monday as global financial markets took fright at the deepening crisis in the eurozone. Stocks fell heavily in Europe and North America while gold rose to a new record of more than $1,600 (£995) an ounce amid concerns that Thursday's emergency summit of EU leaders would once again fail to resolve the debt problems of the single currency's weak members. Officials from eurozone countries were on Monday trying to resolve the row between Angela Merkel and the European Central Bank (ECB) over a possible Greek debt default after a day of turbulence that saw bank shares tumble in late trading. Jean-Claude Trichet, the president of the ECB, is resisting pressure from the German chancellor for Greece's private sector creditors to bear some of the losses of a default, but senior policymakers admitted that it was now vital Thursday's talks in Brussels come up with a credible plan that will restore market confidence after shares, government bonds and commodities all suffered sharp losses. Sources said one option was to convert much of Greece's debts into longer-term bonds, an approach used during the Latin American debt crisis of the 1980s. Lloyds, Royal Bank of Scotland and Barclays were the biggest fallers on the FTSE 100, all losing at least 6% of their value as jittery investors digested the results of Friday's stress tests on European banks, mulled the prospect of the US losing its triple A credit rating and began to worry about the political ramifications of the News International phone hacking scandal for David Cameron. Michael Derks, chief strategist at FxPro, said: "Thus far, the pound has not factored in any real risk premium for political uncertainty. Given the rapidity with which key figures in the scandal are falling on their swords, it could be argued that the pound is being complacent regarding the potential of the hacking issue to ensnare the prime minister and his party."
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1.
Foreign direct investment (FDI) is the category of international investment that reflects the objective of obtaining a lasting interest by an investor in one economy in an enterprise resident in another economy. The lasting interest implies that a long-term relationship exists between the investor and the enterprise, and that the investor has a significant influence on the way the enterprise is managed. Such an interest is formally deemed to exist when a direct investor owns 10% or more of the voting power on the board of directors (for an incorporated enterprise) or the equivalent (for an unincorporated enterprise). FDI flows presented here include re-invested earnings. 2010 data are preliminary estimates. Updated detailed figures will be released by the end of 2011.
2.
The figures presented for 2010 are estimates based on annualised quarterly Balance of Payments data from the Member States as of April 2011, while the data for 2007-2009 correspond to the latest annual FDI data transmission. Data for the EU aggregate take into account confidential data, estimates for Member States missing data and data for Special Purpose Entities (SPEs), that are additionally collected by Eurostat and the ECB from Member States not including SPEs’ FDI in national data. This ensures adherence to international standards, exhaustiveness of the EU aggregates and explains why the total of Member States’ flows differs from the EU aggregates. SPEs are mainly financial holding companies, foreign-owned, and principally engaged in cross-border financial transactions, with no or negligible local activity in the Member State of residence.
3.
Eurostat, Statistics in Focus, 25/2011 "Foreign direct investment flows still influenced by the crisis", available free of charge in pdf format on the Eurostat web site.
4.
Offshore Financial Centres (OFC) is an aggregate used in Eurostat FDI data which includes 38 countries. As examples, the aggregate contains European financial centres, such as Liechtenstein, Guernsey, Jersey, the Isle of Man, the Faroe Islands, Andorra and Gibraltar; Central American OFC such as Panama and Caribbean islands like Bermuda, the Bahamas, the Cayman Islands and the Virgin Islands; and Asian OFC such as Bahrain, Hong Kong, Singapore and Philippines.
5.
SPEs account for most of Luxembourg's FDI.
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