European finance chiefs have delayed a decision on the payment of a crucial bailout loan for Greece until October. The head of the eurozone finance ministers group was speaking at a meeting in Wroclaw, Poland. The next eight billion euro (£7 billion) instalment of Greece's bailout loan is needed to keep the country from a disastrous debt default. But officials from the eurozone and the International Monetary Fund (IMF) have delayed their assessment amid questions about whether Greece was doing enough to cut its deficit. Jean-Claude Juncker said officials welcomed "the renewed, firm commitment of Greece" to its austerity programme and said they "would decide in October on the next tranche". A delegation from the eurozone, the IMF and the European Central Bank unexpectedly left Athens on September 2, delaying a much-awaited confirmation that Greece was meeting the terms of its 110 billion euro bailout agreed in May 2010. Fears that Greece might not get the next tranche and default have made Greek bond prices plummet, weighed on the euro's exchange rate with the dollar and caused turmoil on stock markets.
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Saturday, September 17, 2011
European finance chiefs have delayed a decision on the payment of a crucial bailout loan for Greece until October. The head of the eurozone finance ministers group was speaking at a meeting in Wroclaw, Poland. The next eight billion euro (£7 billion) instalment of Greece's bailout loan is needed to keep the country from a disastrous debt default. But officials from the eurozone and the International Monetary Fund (IMF) have delayed their assessment amid questions about whether Greece was doing enough to cut its deficit. Jean-Claude Juncker said officials welcomed "the renewed, firm commitment of Greece" to its austerity programme and said they "would decide in October on the next tranche". A delegation from the eurozone, the IMF and the European Central Bank unexpectedly left Athens on September 2, delaying a much-awaited confirmation that Greece was meeting the terms of its 110 billion euro bailout agreed in May 2010. Fears that Greece might not get the next tranche and default have made Greek bond prices plummet, weighed on the euro's exchange rate with the dollar and caused turmoil on stock markets.
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, as U.S. stocks pared the day’s gains and the euro came under pressure.
Treasury prices may trade in a tight range for the next few sessions ahead of the Federal Reserve’s policy meeting next week.
Yields on the 10-year note fell 1 basis point to 2.07%, after having risen to 2.12% earlier. Yields move inversely to prices, and one basis point is 1/100th of a percentage point.
Yields on the 30-year bond decreased 2 basis points to 3.33%.
Yields on 2-year notes were 2 basis points lower at 0.18%.
All eyes were on a meeting of euro-zone financial ministers in Poland, which was uncharacteristically being attended by U.S. Treasury Secretary Timothy Geithner, a move that analysts said underlined international worries about the region’s ability to avoid sparking a fresh global financial crisis.
Geithner urged his counterparts and the European Central Bank to work together to solve the region’s debt crisis. Geithner is the first U.S. Treasury secretary to attend an informal meeting of euro-zone finance ministers.
The New York Times - Should people be able to bet on your death? How about your financial failure?
In the United States Senate, Wall Street won one this week when the Senate voted down a proposal to bar the so-called naked buying of credit-default swaps. If that were the law, you could not use swaps to bet a company would fail. The exception would be if you already had a stake in the company succeeding, such as owning a bond issued by the company.
On the other side of the Atlantic, Germany announced new rules to bar just such betting — but only if the creditors were euro area governments.
None of this argument would be taking place if regulators had done their jobs years ago and classified credit-default swaps as insurance.
Credit-default swaps are, in reality, insurance. The buyer of the insurance gets paid if the subject of the swap cannot meet its obligations. The seller of the swap gets a continuing payment from the buyer until the insurance expires. Sort of like an insurance premium, you might say.
But the people who dreamed up credit-default swaps did not like the word insurance. It smacked of regulation and of reserves that insurance companies must set aside in case there were claims. So they called the new thing a swap.
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