Euro banks – Last Jeudi http://lastjeudi.org/ Wed, 21 Jul 2021 12:47:50 +0000 en-US hourly 1 https://wordpress.org/?v=5.8 https://lastjeudi.org/wp-content/uploads/2021/03/cropped-icon-1-32x32.png Euro banks – Last Jeudi http://lastjeudi.org/ 32 32 Italy strives to meet UniCredit conditions for MPS deal, sources say https://lastjeudi.org/italy-strives-to-meet-unicredit-conditions-for-mps-deal-sources-say/ https://lastjeudi.org/italy-strives-to-meet-unicredit-conditions-for-mps-deal-sources-say/#respond Wed, 21 Jul 2021 10:36:00 +0000 https://lastjeudi.org/italy-strives-to-meet-unicredit-conditions-for-mps-deal-sources-say/ By Giuseppe Fonte, Valentina Za ROME (Reuters) – Italy’s Treasury is working to meet conditions UniCredit set for a possible takeover of Monte dei Paschi in the latest attempt to offload the ailing state bank to a healthier peer, said three sources familiar with the matter. FILE PHOTO: The entrance to Italian bank Monte Dei […]]]>

ROME (Reuters) – Italy’s Treasury is working to meet conditions UniCredit set for a possible takeover of Monte dei Paschi in the latest attempt to offload the ailing state bank to a healthier peer, said three sources familiar with the matter.

FILE PHOTO: The entrance to Italian bank Monte Dei Paschi di Siena is seen in San Gusme near Siena, Italy September 29, 2016. REUTERS / Stefano Rellandini / File Photo

Despite the lack of significant progress in the protracted negotiations, the Treasury still sees UniCredit as the best option for Monte dei Paschi (MPS), the sources told Reuters on condition of anonymity as the talks are private.

The three sources said the two sides have continued to negotiate, warning that any deal will take time. One of the sources said the positions were far apart and it was too early to predict the outcome of the talks. UniCredit declined to comment.

The Treasury is currently avoiding alternative solutions, such as dismantling MPS, although sources have said it may consider asset splits to facilitate a single-buyer sale.

The main condition posed by the Milanese bank in the talks that began almost a year ago under former chief executive Jean Pierre Mustier is that any deal leaves intact the capital reserves that UniCredit has worked hard to strengthen.

New CEO Andrea Orcel, the former head of investment banking at UBS, has shown little interest in a deal in conversations with Treasury officials, focusing instead on overhauling UniCredit’s structure.

Unveiling the latest organizational changes last week, Orcel said he was currently focusing on “internally,” after previously indicating that he might consider mergers and acquisitions to speed up his earnings recovery strategy.

After saving MPS in 2017 by spending 5.4 billion euros ($ 6.4 billion), the Italian Treasury has pledged to reduce its stake by 64% by mid-2022 at the latest.

A major obstacle to a sale has always been some 10 billion euros in legal risks to MPS after years of mismanagement.

The Treasury and its advisers have devised a complex plan to protect the buyer from legal claims, but UniCredit is expected to approve the plan, sources said.

To pave the way for a deal, the Treasury has also significantly reduced MPS’s soured loan burden, and sources have said it is ready to do more on the bad loans front.

To ensure that the deal does not burn capital, in addition to receiving liquidity to cover restructuring costs and replenish its reserves, UniCredit must also be able to exit without penalty from the business partnerships that MPS has set up. on insurance and other financial products, a person familiar with the matter said.

So far, Rome has set aside 1.5 billion euros to recapitalize MPS as part of a merger.

MPS, which is expected to hurt Europe-wide industry stress tests this month, told the European Central Bank it would raise € 2.5 billion by April 2022.

The amount of state liquidity required for a deal to be reached has always been one of the sticking points in discussions with MPS’s assessment, people familiar with the process said.

To soften a deal, the Treasury has put in place tax incentives for mergers approved in 2021 that involve a € 2.2 billion capital increase in a UniCredit-MPS deal. Political opposition in May thwarted an attempt to further strengthen incentives.

($ 1 = 0.8500 euros)

Report by Giuseppe Fonte in Rome and Valentina Za in Milan; Editing by Edmund Blair


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FTSE Recovers But Pound Slips As Covid Cases Rise https://lastjeudi.org/ftse-recovers-but-pound-slips-as-covid-cases-rise/ https://lastjeudi.org/ftse-recovers-but-pound-slips-as-covid-cases-rise/#respond Tue, 20 Jul 2021 17:06:55 +0000 https://lastjeudi.org/ftse-recovers-but-pound-slips-as-covid-cases-rise/ Begbies Traynor has warned that business insolvencies are expected to increase in the second half of the year when the government ends a series of pandemic supports, my colleague reports Simon foy. The insolvency specialist said he would be boosted by an “increase in market activity levels”, but added that he did not foresee a […]]]>

Begbies Traynor has warned that business insolvencies are expected to increase in the second half of the year when the government ends a series of pandemic supports, my colleague reports Simon foy.

The insolvency specialist said he would be boosted by an “increase in market activity levels”, but added that he did not foresee a “sudden insolvency tsunami” when ministers end emergency business support.

Executive Chairman Ric Traynor said: “We don’t expect a tidal wave of insolvencies to suddenly emerge, but there will undoubtedly be an element of catching up among companies that haven’t. not started any formal process in the past year.

“There will also be companies that entered the pandemic in a proper financial position but now carry a lot of debt that they may not be able to handle. “

The Aim-listed company said the increase in activity will occur over the next two years, with the highest number of insolvencies likely to occur in the retail, hospitality and industry sectors. construction.

It came as the company posted a 35% drop in pre-tax profits to £ 1.9million, despite revenue rising nearly a fifth to £ 83.8million sterling.

Its performance is driven by four acquisitions made since the start of the year and the improvement in trade.

Earlier this year, Begbies Traynor purchased independent insolvency practitioners CVR Global and David Rubin & Partners, “which significantly increased our scale in the key London market and opened our first offshore offices,” said the society.

The board declared a dividend of 3pc per share, an increase of 7pc from last year. Shares fell 0.6 percent to 129.4 percent, valuing the company at £ 196.4million.


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Majority of EU citizens are in favor of the euro, Romanians being the most enthusiastic https://lastjeudi.org/majority-of-eu-citizens-are-in-favor-of-the-euro-romanians-being-the-most-enthusiastic/ https://lastjeudi.org/majority-of-eu-citizens-are-in-favor-of-the-euro-romanians-being-the-most-enthusiastic/#respond Tue, 20 Jul 2021 08:29:13 +0000 https://lastjeudi.org/majority-of-eu-citizens-are-in-favor-of-the-euro-romanians-being-the-most-enthusiastic/ Croatia is now near the end of the game for its entry into the euro zone. Last month, the European Central Bank (ECB) make a list of five Bulgarian banks and eight Croatian banks that it would supervise directly from 1 Octoberst, including the Croatian subsidiaries of Unicredit, Erste, Intesa, Raiffeisen, Sberbank and Addiko, writes […]]]>


Croatia is now near the end of the game for its entry into the euro zone. Last month, the European Central Bank (ECB) make a list of five Bulgarian banks and eight Croatian banks that it would supervise directly from 1 Octoberst, including the Croatian subsidiaries of Unicredit, Erste, Intesa, Raiffeisen, Sberbank and Addiko, writes Colin Stevens.

This announcement follows Croatia’s official admission to the euro area exchange rate mechanism (ERM II) in July, and meets the ECB’s regulatory requirements that all major Croatian banks must be placed under its supervision. To move forward and officially join the euro zone, Croatia will now have to participate in ERM II “for at least two years without serious tensions”, and above all without devaluing its current currency, the kuna, against the euro.

Of course, in 2020 serious budget pressures have become a reality for European governments.

Problems on several fronts

According to the World Bank, Croatia’s overall GDP is now should collapse 8.1% this year, certainly an improvement over the annual decline of 9.3% that the Bank had forecast in June. The Croatian economy, heavily dependent on tourism, has been shaken by the ongoing pandemic. Worse, the country’s attempt to make up for lost ground with a post-containment rush of summer vacationers saw him blamed for triggering the surge in Covid-19 cases in several other European countries.

The slowdown caused by Covid is also not the only economic problem facing Prime Minister Andrej Plenković, including the Croatian Democratic Union (HDZ). held in power in the July elections in the country, and the independent Minister of Finance Zdravko Marić, who had been in office since before Plenković took office.

Even as Croatia receives coveted support from other eurozone economies, the country continues to be rocked by corruption scandals – the most recent being the salacious revelations of a secret club in Zagreb frequented the country’s political and business elites, including several ministers. While the rest of the population endured strict containment measures, many of Croatia’s most powerful people flouted lockdown rules, exchanged bribes and even enjoyed the company of escorts brought in from Serbia.

There is also the ongoing question of how the Croatian government in 2015 forced the banks to retroactively convert loans from Swiss francs to euros and pay more 1.1 billion euros in customer repayments, she had also loaned money. The issue continues to disrupt Zagreb’s relations with its own banking sector and with the European financial industry more broadly, with the Hungarian bank OTP filing complaint against Croatia at the World Bank’s International Center for Settlement of Investment Disputes (ICSID) this month to recoup an estimated 224 million kuna (29.58 million euros) in losses.

The endemic problem of corruption in Croatia

Like its counterparts in other parts of the former Yugoslavia, corruption has become a endemic problem in Croatia, even the gains made after the country’s accession to the EU are now in danger of being lost.

Much of the blame for the country’s perceived setback lies at the feet of the HDZ, largely due to the lawsuit legal saga surrounding former prime minister and HDZ party leader Ivo Sanader. While Sanader’s arrest in 2010 was seen as a sign of the country’s commitment to rooting out corruption as it strived to join the EU, the country’s Constitutional Court overturned the sentence in 2015. Today ‘hui, only one of the cases against him – for war profiteers – has been officially concluded.

The inability to effectively prosecute past wrongdoing caused Croatia to drop in Transparency International’s rankings, with the country scoring just 47 out of 100 points in the group’s “Perceived Corruption” index. With civil society leaders such as Oriana Ivkovic Novokmet pointing the finger at corruption cases that languish in court or never be brought at all, the decline is hardly surprising.

Instead of turning a corner, the current members of the HDZ government are facing their own allegations. Zagreb’s sweatshop frequented by Croatian leaders included Minister of Transport Oleg Butković, Minister of Labor Josip Aladrović and Minister of Economy Tomislav Ćorić among his clientele. Andrej Plenkovic himself is currently locked in a war of words over the country’s anti-corruption efforts with his main political opponent, Croatian President Zoran Milanović. A former leader of the rival Social Democratic Party and Plenkovic’s predecessor as prime minister, Milanović was also a club boss.

Zdravko Marić between stone and banking crisis

Finance Minister (and Deputy Prime Minister) Zdravko Marić, although operating outside established political groups, has also been dogged by questions of potential misconduct. Earlier in his tenure, Marić faced the prospect of investigation in its links with the food group Agrokor, Croatia’s largest private company, for reasons of conflict of interest. Although he himself is a former employee of Argokor, Marić nevertheless entered into secret negotiations with his former company and its creditors (mainly the Russian state-owned bank Sberbank) who exploded in the local press in March 2017.

A few weeks later, Agrokor was put under state administration because of his crushing debt. In 2019, the company had been relax and its renamed operations. Marić himself finally survived the Agrokor scandal, with her colleague Minister Martina Dalić (who headed the Ministry of the Economy) forced to leave office rather.

Agrokor, however, was not the only economic crisis that plagued Plenkovic’s government. Prior to the 2015 Croatian elections, in which Zoran Milanović’s Social Democrats lost power to the HDZ, Milanović undertook a number of populist economic measures in order to consolidate its own electoral position. They included a debt cancellation program for poor Croats who owed money to the government or municipal utilities, but also radical legislation which converted billions of dollars in loans granted by banks to Croatian customers from Swiss francs into euros, with retroactive effect. Milanović’s government forced the banks themselves to bear the costs of this sudden change, causing years of legal action by the lenders concerned.

Of course, after losing the election, these populist movements eventually turned into a poisoned chalice for Milanović’s successors in government. The loan conversion problem plagued the HDZ since 2016, when the first lawsuit against Croatia was filed by Unicredit. At the time, Marić argued in favor of an agreement with the banks to avoid the substantial costs of arbitration, especially with the country under pressure of the European Commission to change course. Four years later, the issue remains more of an albatross around the government’s neck.

Challenges for the euro

Neither Croatia’s corruption problems nor its conflicts with the banking sector were enough to derail the country’s ambitions for the euro area, but to bring this process to completion, Zagreb will need to commit to a level of budgetary discipline and reform that it has not yet demonstrated. The reforms needed include reducing budget deficits, strengthening anti-money laundering measures and improving corporate governance in state-owned enterprises.

If Croatia is successful, the potential benefits including lower interest rates, greater investor confidence and closer links with the rest of the single market. As is so often the case with European integration, the biggest gains are the improvements to the house along the way.



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Global markets tumble amid pessimism over surge in Covid-19 cases | Stock markets https://lastjeudi.org/global-markets-tumble-amid-pessimism-over-surge-in-covid-19-cases-stock-markets/ https://lastjeudi.org/global-markets-tumble-amid-pessimism-over-surge-in-covid-19-cases-stock-markets/#respond Mon, 19 Jul 2021 18:23:00 +0000 https://lastjeudi.org/global-markets-tumble-amid-pessimism-over-surge-in-covid-19-cases-stock-markets/ Stock markets have fallen across the world amid growing pessimism over an increase in Covid-19 infections, with £ 44bn wiped off the value of the FTSE 100 index of major UK companies when some have called “freedom day” pandemic restrictions in England. The prospect of slowing global growth caused most European stock markets to drop […]]]>


Stock markets have fallen across the world amid growing pessimism over an increase in Covid-19 infections, with £ 44bn wiped off the value of the FTSE 100 index of major UK companies when some have called “freedom day” pandemic restrictions in England.

The prospect of slowing global growth caused most European stock markets to drop significantly, after falling in Asia overnight, when Indonesia reported an increase in cases and some athletes were tested positive at the Olympic Village in Tokyo, with the Games due to open on Friday. .

In the UK, the FTSE 100 closed 2.4% lower at 6,844 points, its largest one-day decline since May 11 and its lowest close since early April.

In the process, £ 44bn was wiped off the value of FTSE 100 companies, with ITV being the biggest drop, down 6.6%, fearing ad revenue could be hit by any stalled recovery UK economy.

The massive sell-off of shares by investors has also hit travel and oil companies, banks and retailers. Shares of BP and Lloyds Banking Group ended the day down nearly 5%, while Primark owner Associated British Foods fell 4% and Next fell 3.4%.

Travel agencies were also among the biggest falls in London stock markets, as uncertainty over the spread of the virus fueled concerns over further crackdowns by the Johnson administration on travel arrangements to the ‘foreign.

British Airways owner IAG has shut down more than 5% and aircraft engine manufacturer Rolls Royce has lost 6.5% of its market value. In the FTSE 250, easyJet fell 6.5% and tour operator Tui almost 4%.

The pan-European Stoxx 600 index fell 2.3%, its lowest close in two months, with the German stock exchanges Dax and French Cac falling 2.5%.

In the United States, Wall Street investors have joined in the stock market liquidation, as the Dow Jones industrial average fell more than 2% at lunchtime in New York City.

Fears that a loosening of foreclosure rules by Boris Johnson’s government would encourage the spread of new variants in the UK also weighed heavily on the value of the pound, which lost ground against the euro and the dollar. . The British pound fell to $ 1.37, its lowest since April, and fell about 0.6% against the euro to € 1.16.

Analysts said few markets were immune to the sense of foreboding that accompanied warnings from medical professionals that the virus could still cause increased hospitalizations and harm young people despite higher vaccination rates.

Susannah Streeter, senior investment analyst at stock broker Hargreaves Lansdown, said: “With some scientists warning that infections could reach 200,000 per day by September, there is now a feeling the UK might consider a new fall lockdown. “

Russ Mold, chief investment officer of brokerage firm AJ Bell, said: “Covid is spreading rapidly again and airlines, restaurants and leisure businesses might not get the strong summer trade they’ve been hoping for ever since. long time.

“The big concern in the market is whether we are going to see a slowdown in the global economic recovery, and this could be the dominant force that will cause a bad period for stocks in the weeks to come,” he said. .

Many investors have withdrawn their money from stocks and sought safe haven assets such as government bonds, pushing some yields – the effective interest rate on a bond – to lows not seen since February.

The 10-year US Treasury yield hit a five-month low of 1.26% and the German 10-year yield fell to minus 0.37%, the lowest since early March.

Brent crude, the international benchmark for oil, fell 4% to $ 70.63 (£ 52.21) a barrel amid concerns over the likely trajectory of global economic growth following earlier falls caused by Opec , the cartel of oil-producing countries, and its allies having reached an agreement. increase production to counter rising prices.

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There was a ripple effect on oil majors like BP, Royal Dutch Shell and Total, which suffered price declines between 3% and 3.8%.

Lavanya Venkateswaran, analyst at Mizuho Bank in Singapore, said the 10-member Asean economic bloc covering Thailand, Singapore and the Philippines was on the brink of a resurgence of the virus after recent localized outbreaks.

“The more transferable Delta variant delays the recovery of the Asean economies and pushes them further into the doldrums,” she said.

Joshua Mahony, Senior Market Analyst at IG in London, said the rise in UK infections was a setback for travel agencies and hotel companies as their shares were downgraded.

“Although the restrictions have been relaxed, the fact that Covid is so prevalent in the country is eliciting the kind of caution that could inhibit the exact economic activity encouraged by the government,” he said.



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https://www.dailyfx.com/forex/fundamental/forecast/weekly/EUR/2021/07/18/Euro-Forecast-EURUSD-Price-Outlook-Still-Negative-ECB-Meeting-in-Focus.html https://lastjeudi.org/https-www-dailyfx-com-forex-fundamental-forecast-weekly-eur-2021-07-18-euro-forecast-eurusd-price-outlook-still-negative-ecb-meeting-in-focus-html/ https://lastjeudi.org/https-www-dailyfx-com-forex-fundamental-forecast-weekly-eur-2021-07-18-euro-forecast-eurusd-price-outlook-still-negative-ecb-meeting-in-focus-html/#respond Sun, 18 Jul 2021 02:00:00 +0000 https://lastjeudi.org/https-www-dailyfx-com-forex-fundamental-forecast-weekly-eur-2021-07-18-euro-forecast-eurusd-price-outlook-still-negative-ecb-meeting-in-focus-html/ Fundamental Euro Forecast: Bearish The Governing Council of the European Central Bank will announce next Thursday its latest decision on monetary policy in the euro area and everything indicates that it will be one of the last major central banks to tighten its policy after the crisis caused by the pandemic of coronavirus and the […]]]>


Fundamental Euro Forecast: Bearish

  • The Governing Council of the European Central Bank will announce next Thursday its latest decision on monetary policy in the euro area and everything indicates that it will be one of the last major central banks to tighten its policy after the crisis caused by the pandemic of coronavirus and the recovery that followed.
  • If this continued accommodative stance is confirmed by the ECB and its President Christine Lagarde during its post-meeting press conference, the current EUR / USD weakness will likely persist even though some of this narrative has already been incorporated into the rate. exchange.

The price of the euro may weaken further

Next Thursday, the ECB will leave all its monetary policy parameters unchanged. However, his latest political announcement and President Lagarde’s next press conference will be far from routine. Speaking to Bloomberg TV last Sunday, she told investors to prepare for further guidance on monetary stimulus and signaled that new measures could be put in place next year to support the Eurozone economy after the end of the current emergency bond program.

Speaking fair after the ECB raised its inflation target to 2% and acknowledged that it could exceed the target, Lagarde said the Governing Council meeting on July 22 will have “some interesting variations and changes”.It’s gonna be an important meeting, she added, and gIn view of the perseverance that we must show to keep our commitment, the forward-looking orientations will certainly be reviewed. “

Unsurprisingly, this was followed by two days of EUR / USD losses and, after a brief respite on Wednesday, there were more losses on Thursday afterwards. ECB decision-maker Ignazio Visco told the same TV channel as the ECB should keep monetary ultra-easy policy to support the economic recovery in the Eurozone and insulate its financial markets from higher interest rates in the US.

It therefore seems certain that tThe ECB will review its policy this week at align it with its new strategy to allow inflation atget up above 2% for a period of time when interest rates are low. With priceWith growth well below that level for years to come, Visco said the ECB needs to keep borrowing costs low despite some temporary rebounds in inflation.

The key question remains: has all of this already been incorporated into the EUR / USD exchange rate? The ECB, along with the Swiss and Japanese central banks, was already seen as one of the more accommodating central banks, but EUR / USD is still well above its low of 1.1704 for the year on record. March 31st and it wouldn’t be a surprise. if it soon falls back to that level.

EUR / USD price table, daily period (January 4 – July 15, 2021)

Source: IG (You can click on it for a larger image)

Week ahead: consumer confidence and flash eurozone PMI

Once the ECB meeting is over, EUR / USD traders will still need to be on the lookout for some important data points. First, data on consumer confidence for the euro area on the same day, but most important will be the “flash” indices of purchasing managers for the euro area and its member states in July. As always, readings above forecast will be positive for EUR / USD and readings below forecast will be negative.

— Written by Martin Essex, Analyst

Do not hesitate to contact me on Twitter @MartinSEssex

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How does a central bank innovate on CBDCs when they belong to a monetary union? Lithuania chooses numismatic-based NFTs https://lastjeudi.org/how-does-a-central-bank-innovate-on-cbdcs-when-they-belong-to-a-monetary-union-lithuania-chooses-numismatic-based-nfts/ https://lastjeudi.org/how-does-a-central-bank-innovate-on-cbdcs-when-they-belong-to-a-monetary-union-lithuania-chooses-numismatic-based-nfts/#respond Sat, 17 Jul 2021 12:50:59 +0000 https://lastjeudi.org/how-does-a-central-bank-innovate-on-cbdcs-when-they-belong-to-a-monetary-union-lithuania-chooses-numismatic-based-nfts/ When a country belongs to a monetary union, for all intents and purposes the currency is exogenous to that country, in other words the country’s central bank does not control the issuance of the currency. The euro area, made up of 19 countries that have adopted the euro, belongs to the euro monetary union. The […]]]>


When a country belongs to a monetary union, for all intents and purposes the currency is exogenous to that country, in other words the country’s central bank does not control the issuance of the currency. The euro area, made up of 19 countries that have adopted the euro, belongs to the euro monetary union. The ECB, which is headed by a president and a council of heads of vscentral banks, sets the monetary policy of the zone. Even if the head of a country’s central bank has influence over monetary policy, in practice it would be difficult for a country to significantly influence the monetary policy of the EU. We saw how it worked for Greece during the Grexit fury. When sovereign debts are denominated in an exogenous currency, the interest rates on that debt are purely a function of the market, a mechanism by which speculators and other traders can inflict severe damage on the national economy. This is what happens when there is a disconnect between fiscal and monetary policies operating on an economy like all EU countries.

Lithuania, after joining the monetary union in 2015, finds itself without direct control of monetary policy. 2015 was the last year that the Lithuanian litas was legal tender, before the adoption of the euro. I told Marius Jurgilas about the Lithuanian strategy of dipping our toes into the waters of the CBDC. This interview took place before the current craze for CBDCs in Europe and around the world. Jurgilas, who was educated in the United States and worked as an academic and at the Bank of England and Norges before joining the Lithuanian Central Bank as a member of the board. Jurgilas is responsible for the supervision service, the market infrastructure department, the security department and the center of excellence in finance and economic research. Areas that place it at the forefront of digital innovation and research.

Innovation in central banks almost sounds like an oxymoron, if part of your work is against the culture of the institution, what do you do? As a student and scholar, Jurgilas admitted that he was not interested in financial market infrastructure (IMF). Now he sees how important the infrastructure is, as it relates to the aspects of supervision and arbitration of the work. In fact in the expression of monetary policy itself. Lithuania, in order to get out of its weak economic position when the euro was adopted, exerted general pressure on innovation. Therefore, the innovation climate in Lithuania is very favorable. Research on CBDCs was done through the backdoor of a numismatic or collector’s coin, which the Bank of Lithuania could issue, unlike direct issuance of a sovereign CBDC which it could not.

LBCoin was planned and released to roughly coincide with the 100th anniversary of Lithuania’s declaration of independence. The blockchain-based LBCOIN consists of six digital tokens and one physical collector’s coin. The Bank of Lithuania issued 4,000 LBCOIN, or 24,000 digital tokens and 4,000 physical collector coins. Each digital token features one of the 20 signatories of the Lithuanian Independence Act and belongs to one of six categories of signatories (priests, presidents, diplomats, industrialists, academics, city officials) with 4,000 tokens each . Of course, they are all men. Very similar to all the male signatories of the Declaration of Independence in America. Women’s suffrage was only ratified at the federal level by the 19th Amendment, even in the United States, in 1920. Women’s suffrage and women’s right to vote in Lithuania came into being in 1918, as the short declaration contains these words “Constituent Assembly … democratically elected by all its inhabitants”.

For every LBCOIN purchased from a dedicated online store (lbcoin.lb.lt) for € 19.18, collectors receive six randomly selected digital tokens. They can then exchange these tokens for a physical collector’s coin, store them on the LBCOIN online store, send them as gifts, exchange them with other collectors, or transfer them to a public NEM blockchain network (NEM wallet). The denomination of € 19.18 commemorates the year of the signing of Lithuanian independence, 1918.

The idea of ​​LBCoin has some correspondence with the way Lithuanian independence was declared. Surrounded by powerful states, the declaration of independence was a courageous decision taken within severe limits. Independence did not come about immediately. In fact, the Germans immediately repressed and were only neutralized because of their loss in WWI. He put Lithuania on the path to independence, which it enjoyed between 1920 and 1940; then in the bowels of the Soviet state after World War II. It was not until 1990, with the break-up of the Soviet Empire, that the 1918 declaration served as the legal basis for the constitution of a new Lithuanian state.

The idea of ​​a collector’s item or NFT creates a space for experimentation and a basis for innovating on CBDCs. It took a lot of consultation, debate and compromise. It’s a brilliant idea to test the waters, ensuring Lithuania a pride of place at the table when the ECB and BIS sit down to create a digital euro.

If you followed closely, you would have seen that this is the first NFT issued by a central bank, and they did so to test a possible fungible token, a CBDC. In fact, if you scan each of the above images, in high resolution from the Bank of Lithuania numismatic booklet, with a QR reader, it will take you to the signatory’s corresponding Lithuanian Wikipedia entry. With the exception of those who died before World War II, many of them perished in Siberia, en route or under the Nazi regime. Of those who escaped the blaze in Europe, three made it to the United States and died there. A little independence! One of the most interesting, Jonas Basanavičius, Patriarch of the Nation and Chairman of the Council, studied to be a priest, became a doctor, created the first Lithuanian-language newspaper, and collected and published Lithuanian folklore, fortunately perished before the horrors of World War II and the subsequent sovietization of his homeland. The capsule’s biography shares its characteristics with most of the other 20 signatories, all of them Renaissance men, very interested in folklore and folk dance, in Lithuania deep, or deep Lithuania.

NFTs have been in the news lately as they appear to be a way to issue private (extremely private) tokens and sell them to the public. NFTs are a private currency, completely decentralized and tied to a specific individual; everything from a first tweet, a love letter, an idiosyncratic collection of works worked and instagrammed for years; all personal production is feed for the NFT mill. Many NFTs that have been issued have also shown that, contrary to protests, their current implementations are extremely centralized, even though they are issued over a decentralized network like Ethereum. Whoever controls the smart contract that issued the ERC-721 token controls the NFT, if it is a business, it could go bankrupt. NFTs have been removed and sometimes NFTs that cost $ 1 cost $ 200 in gasoline costs to sell.

As it is issued by the Bank of Lithuania, this NFT has a better chance of survival. To make it more attractive, it can be self-stored on the public NEM blockchain in an NEM wallet. NEM, although relatively unknown here in the United States, has played an important role in business circles in Europe.

Jurgilas also answered some of my questions about CBDCs in general, as he is also a member of the BIS innovation team. Regarding the Chinese CBDC called DC / EP or e-CNY, Jurgilas said there was no expressed policy on the international role of the euro. This seems to change as the international importance of the euro enters the discussions, perhaps influenced by the actions of other central banks.

On the two-speed model of CBDC issuance, or issuance by central banks and distribution by commercial banks. The opposite idea is that of direct central bank accounts for citizens. According to Jurgilas, this was a difference between the quantity of money and monetary policy based on inflation targeting. Both ways of controlling the economy are difficult. On the related subject of private money against public money; Jurgilas believes that it would be doing the general public a disservice to engage in this debate. Especially if we switch to a totally exogenous standard like gold. This will not stop excessive risk-taking and the introduction of instability in national and international economies. In my opinion, Jurgilas’ answer will also be of use to people who have suggested bitcoin as the standard.

Jurgilas maintains that cash and CBDCs will coexist, a sentiment shared by most central bankers. Regarding cryptocurrencies, Jurgilas says they are assets, assets have prices, prices have a forward structure (i.e. spot price, month price, etc.) what leads to the concept of interest rate is not a new concept; and even the exclusivity of crypto is also familiar. Establish that DeFI is just old wine in new bottles. The adoption of stable coins has certainly attracted attention, but above all from a prudential and consumer protection point of view. The next MiCA regulation currently being discussed in the European Union concerns all crypto-assets, including stablecoins. Regarding the payment of benefits; Jurgilas believes that CBDCs are not needed for this, especially in Europe as these payment rails work very well. The demand for changes in the payment infrastructure due to the digitization of many verticals can be met by the CBDCs, as a true central banker he hedged his bets by saying that only time will tell.

LBCoin uses the ISO / IEC 27001 standard, which is a cybersecurity standard. Security is paramount in any technical infrastructure created by a central bank, even if it is an NFT collector’s item.

We haven’t discussed the privacy aspect of CBDCs, but these debates about the form and function of CBDCs are sure to resonate in the next 5-10 years as countries decide (or not) to digitize. their basic monetary infrastructure. LBCoin is a way to test the waters, especially for a central bank whose control of monetary policy has been ceded to a monetary union.



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This is why American companies always want to be in China https://lastjeudi.org/this-is-why-american-companies-always-want-to-be-in-china/ https://lastjeudi.org/this-is-why-american-companies-always-want-to-be-in-china/#respond Thu, 15 Jul 2021 12:12:08 +0000 https://lastjeudi.org/this-is-why-american-companies-always-want-to-be-in-china/ By Julia Horowitz, CNN Business It is difficult for American companies to operate in China. But the latest data on the country’s economy highlights why, for many companies, it is still worth it. What’s Happening: China’s Economic Output increased by 7.9% in the April-June quarter compared to the same period a year ago, China’s National […]]]>


By Julia Horowitz, CNN Business

It is difficult for American companies to operate in China. But the latest data on the country’s economy highlights why, for many companies, it is still worth it.

What’s Happening: China’s Economic Output increased by 7.9% in the April-June quarter compared to the same period a year ago, China’s National Bureau of Statistics said Thursday.

This growth rate was significantly slower than the 18.3% year-on-year increase recorded by China in the first quarter. But this period has been boosted by comparisons to the depth of the country’s Covid-19 lockdowns in 2020 – and no one expected growth of this magnitude to be sustained.

“Overall, activity in China remained strong in [the second quarter]Said Julian Evans-Pritchard, senior Chinese economist at Capital Economics, in a note to clients.

There are some signs of weakness. Retail sales growth slowed to 12.1% in June, from 12.4% in May, according to data released Thursday. This is the slowest growth rate this year.

“[The] the data continues to point to a patchy recovery, ”said Yue Su, senior economist for The Economist Intelligence Unit.

But overall, 7.9% growth as the recovery solidifies is remarkable and keeps China on track to easily exceed its annual growth target of over 6%.

The statistics are a reminder of why U.S. companies and other multinationals are determined to continue doing business in China despite unpredictable regulations, market access challenges and intellectual property protection challenges.

In his earnings call earlier this month, Levi Strauss said second-quarter revenue in China was now 3% higher than the same period in 2019.

“As one of our biggest growth opportunities, we remain focused on sustaining this momentum,” CEO Chip Bergh told analysts.

PepsiCo CEO Ramon Laguarta praised the strength of the company’s business in China during a call with analysts this week, highlighting the strong economic recovery from the Covid crisis.

Tensions between Washington and Beijing and human rights concerns have recently made doing business in China even more difficult for Western companies.

Remember: Earlier this year, companies such as H&M, Nike, Adidas and Burberry facing boycotts because of positions they had taken in the past against the alleged use of forced labor to produce cotton in China’s western Xinjiang region.

But for many, China is simply too great an opportunity to miss, given the size of its consumer base and its continued pace of growth.

Airlines are making money again

US airlines just reported another round of quarterly losses. It could very well be their last.

The latest: Delta Air Lines said on Wednesday it was profitable in June and expects to be in the dark for the remainder of this year, reports my CNN Business colleague Chris Isidore. United expect to be profitable from this month and are moving forward with expansion plans with their biggest aircraft order in history.

“The momentum continues as we exit June with an accelerating demand environment,” Delta CEO Ed Bastian said this week.

This does not mean that the industry’s problems are over. Delta reported that despite its success in June, revenue for the quarter was about half of the same period in 2019.

And while leisure travel is actually up from pre-pandemic levels, higher-paying business passengers remain scarce. Delta said domestic business travel in June was about 40% of what it was two years earlier. International travel is also still muted.

Executives are optimistic that these types of trips will resume after Labor Day, but the pace of the recovery remains an open question.

Investor Perspective: Despite optimism, airline stocks are still lagging behind. Delta stock is up 1% this year, compared to 16.5% for the S&P 500. United stock is up 11%.

But analysts are optimistic. Out of 140 ratings for the eight largest US airline stocks, more than half are “buy” or “hard buy” recommendations. In just 18 cases, analysts are urging investors to sell.

There could be a digital euro by the middle of the decade

The European Central Bank continues its efforts to create a digital version of the euro as the use of cash declines and China speeds up testing of its own e-yuan.

The central bank on Wednesday announced a two-year investigation that will examine “key issues regarding the design and delivery” of a digital euro and analyze the potential impact on the market. A final decision on whether or not to deploy a digital euro would come later.

Details, details: a digital euro would not replace cash, but would work in much the same way. Instead of paying for goods or services with banknotes, Europeans could use an electronic form of money issued by the European Central Bank or national central banks on a digital wallet.

The announcement puts Europe on track to potentially deploy a digital currency in 2026. It’s an ambitious timeline, but the ECB is clearly concerned about the consequences of waiting too long to act.

In a speech last month, François Villeroy de Galhau, governor of the central bank of France, said central bank money could become marginal as the use of cash declines and new digital coins and tokens emerging. Europe began to look more seriously at a digital euro after Facebook unveiled its plans to create a digital currency in 2019.

Villeroy also highlighted China’s progress in launching a digital yuan, which is already available in a number of Chinese cities.

“The risk is clearly that Europe loses momentum not only in its desire to strengthen the international role of the euro, but even in its preservation,” he said. “The challenge here is also a geopolitical concern. “

following

BNY Mellon, Morgan Stanley, Truist, US Bancorp and UnitedHealth publish their results before the US markets open. Alcoa and American Outdoor Brands follow after the close.

Also today: Initial US jobless claims for last week at 8:30 a.m. ET. Industrial production data for June follows at 9:15 a.m. ET.

Additionally, Federal Reserve Chairman Jerome Powell testifies before the Senate Banking Committee at 9:30 a.m. ET.

Coming tomorrow: the latest US retail sales data.

The-CNN-Wire
™ & © 2021 Cable News Network, Inc., a WarnerMedia Company. All rights reserved.



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Marketmind: It’s Jay time! | Reuters https://lastjeudi.org/marketmind-its-jay-time-reuters/ https://lastjeudi.org/marketmind-its-jay-time-reuters/#respond Wed, 14 Jul 2021 07:02:00 +0000 https://lastjeudi.org/marketmind-its-jay-time-reuters/ A look at the day ahead from Karin Strohecker FILE PHOTO: Federal Reserve Chairman Jerome Powell testifies before the Senate Banking Committee hearing on Capitol Hill in Washington, USA, December 1, 2020. Susan Walsh / Pool via REUTERS After data showing the biggest rise in consumer prices in the United States in 13 years, we […]]]>


A look at the day ahead from Karin Strohecker

FILE PHOTO: Federal Reserve Chairman Jerome Powell testifies before the Senate Banking Committee hearing on Capitol Hill in Washington, USA, December 1, 2020. Susan Walsh / Pool via REUTERS

After data showing the biggest rise in consumer prices in the United States in 13 years, we hear what Fed Chief Jay Powell has to say about it when he kicks off his two-day testimony on Capitol Hill later. Wednesday.

Inflation in the world’s largest economy, which accelerates for a third consecutive month, silenced the rally in equities, just as equities made a comeback after navigating bond market volatility last week.

Powell will be faced with questions about how transient price pressures might be and how quickly the Fed might need to withdraw the monetary support that has been critical to the markets.

Wednesday’s numbers prompted markets to advance the timing of the Fed’s first rate hike, bets that took the dollar to a three-month high against the euro and a one-week high against the yen.

An additional complication was weak demand at Wednesday’s 30-year Treasury bond auction, which pushed 10-year yields above 1.4%. And after a softer Wall Street close, Asian stocks fell while European and US markets are expected to open lower.

Price pressures are also a hot topic elsewhere, with data showing UK inflation still exceeds the Bank of England’s target, hitting 2.5%.

Meanwhile, some central banks are pushing ahead with stimulus withdrawal plans – New Zealand has announced the end of its quantitative easing program linked to the pandemic. Bets on a rate hike this year caused the Kiwi dollar to jump 1%.

Later today, the Bank of Canada is also expected to announce its intention to gradually reduce asset purchases.

Key developments that should provide more direction to the markets on Wednesday:

-British inflation jumps to 2.5% in June

-Bank of Canada should decline

-New Zealand bank ends bond purchases and paves way for possible rate hikes

-Meetings of the central banks of Turkey, Chile and Croatia

-WPI inflation in India

– Swedish IPC

-Industrial production in the euro zone

-ECB board member Isabel Schnabel speaks

-Bank of England Deputy Governor Dave Ramsden speaks

-Auctions: German Bund at 10 years

-Revenues: Citi, BofA, BlackRock, Wells Fargo, Delta Airlines

Chart: Inflation in the United States –

Reporting by Karin Strohecker; edited by Sujata Rao



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After the strategy review, the ECB walks on the tightrope of inflation https://lastjeudi.org/after-the-strategy-review-the-ecb-walks-on-the-tightrope-of-inflation/ https://lastjeudi.org/after-the-strategy-review-the-ecb-walks-on-the-tightrope-of-inflation/#respond Mon, 12 Jul 2021 17:27:05 +0000 https://lastjeudi.org/after-the-strategy-review-the-ecb-walks-on-the-tightrope-of-inflation/ The European Central Bank is walking a tightrope on managing inflation expectations, with higher public spending in the euro area likely to drive annual price hikes towards, and possibly beyond, its new target ” symmetrical ”by 2%. This was the main message from Luis de Guindos, vice-president of the ECB, during an OMFIF briefing on […]]]>


The European Central Bank is walking a tightrope on managing inflation expectations, with higher public spending in the euro area likely to drive annual price hikes towards, and possibly beyond, its new target ” symmetrical ”by 2%. This was the main message from Luis de Guindos, vice-president of the ECB, during an OMFIF briefing on July 12.

He pointed out how fiscal policy in the euro area – estimated to boost 4 percentage points in gross domestic product this year – was playing an “important role” in boosting underlying interest rates and inflation. . He warned of the need for fiscal consolidation once the pandemic is over.

Although headline inflation in the euro area is expected to reach 2.9% by the end of the year, underlying and headline rates are expected to fall back to 1.4% in 2023, mainly reflecting weak labor markets. More forcefully than other ECB policymakers, de Guindos has pointed out the possibility of a price hike generated by wage inflation from the fall if wage deals gain momentum. When asked if the ECB could join with other European central banks (such as the Netherlands) in supporting higher wage increases to help meet his inflation target, de Guindos replied that the ECB had not taken sides in the wage negotiations. “Forecasts can be right, but they can also be wrong, and forecasting inflation is particularly difficult due to globalization and potential supply chain blockages,” he commented.

De Guindos has been asked several times about the perceived inadequacy of the ECB’s asset purchase program to drive inflation to the desired rate. He indicated that regardless of the decision to end or extend the € 1.85 billion pandemic emergency procurement program at the end of March 2022, greater use of ‘unconventional’ instruments would be needed. He left open the question of whether a possible “post-pandemic purchasing program” could include flexibility in asset purchases across jurisdictions, durations and asset classes. It is a central element of the PEPP, even if it violates (exceptionally during the Covid-19 crisis) the fundamental principles of the ban on monetary financing of the ECB enshrined in the Maastricht Treaty.

According to an influential analyst at the July 12 session, “the ECB should show more commitment to a results-oriented policy linking its monetary policies to real inflation rates. Without this commitment, I fear that it will establish its objective without giving itself the means to achieve it and does not appreciate the need to increase its credibility by making commitments that are more concrete than nebulous.

De Guindos acknowledged that the tortuous conditionality of the ECB’s July 8 statement on the conclusion of its 18-month strategic review partly reflected the need to gain unanimity in its governing council, giving monetary conservatives more more weight than usual in the decision-making of the ECB. Far from specifically targeting inflation above 2% to compensate for the underestimation of the past 10 years, the ECB last week adopted cautious language bearing many characteristics of the German Bundesbank. The ECB has said it is “properly prepared and based on careful proportionality analysis” to take “particularly strong monetary policy action” if justified by “significant negative shocks” – which could “involve a transitional period during which inflation is slightly above the target ”. ‘

Like Christine Lagarde, President of the ECB, de Guindos did not wish to be frozen on timing. The ECB “would tolerate inflation exceeding 2% depending on the circumstances”. Stressing that eurozone interest rates have been held for years at their lower limit, he refused to rule out a further cut in negative rates. The need for asset purchases would continue as the line blurred between conventional and unconventional tools.

Asked about the unity of the board of directors, de Guindos countered that “price stability is the agreed objective for the 25 members”. The ECB would continue to support economic policy. “Even if we will see a recovery from the pandemic, there will still be risks and it is fragile. The unemployment rate will only become clear after the phasing out of government employment assistance. ‘

Along with criticism from some commentators that it needs to increase inflation with more force, the ECB has faced complaints that it should take near double-digit increases in broad money supply more seriously. Juan Castañeda, director of the Institute for International Monetary Research at the University of Buckingham, an inflation “hawk”, stressed the inconsistency of the ECB’s monetary analysis. While maintaining the “monetary pillar” in its strategy, the ECB – as Guindos did on July 12 – downplays the relationship between broad money growth and inflation. “This hampers the predictability of the ECB’s policies,” Castañeda said, “as well as its focus on maintaining price stability. This regardless of whether or not we agree on stronger or stronger inflationary trends. weak. ‘

On the delicate issue of the creation of a banking union, de Guindos offered his support for the development of a European deposit guarantee system. He said it was “not good news” that the latest attempt to seal a deal failed last month. He underscored a cautious approach to building a digital euro, citing problematic repercussions on financial stability. A digital currency issued by the central bank could deprive banks of deposits and seriously undermine their business models, he added.

David Marsh is President and Ellie Groves is Executive Director, Economics and Monetary Policy Institute, OMFIF.



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Lords shine the spotlight on ‘addictive’ quantitative easing https://lastjeudi.org/lords-shine-the-spotlight-on-addictive-quantitative-easing/ https://lastjeudi.org/lords-shine-the-spotlight-on-addictive-quantitative-easing/#respond Sun, 11 Jul 2021 05:00:00 +0000 https://lastjeudi.org/lords-shine-the-spotlight-on-addictive-quantitative-easing/ Haldane criticizes the Bank for maintaining ultra-low interest rates and a massive “quantitative easing” stimulus. A “higher inflation narrative could become the dominant theme,” he says, arguing that if policy changes are left too late, then the Bank will have to impose larger and faster rate hikes. Such a monetary “handbrake trick” means “everyone would […]]]>


Haldane criticizes the Bank for maintaining ultra-low interest rates and a massive “quantitative easing” stimulus. A “higher inflation narrative could become the dominant theme,” he says, arguing that if policy changes are left too late, then the Bank will have to impose larger and faster rate hikes. Such a monetary “handbrake trick” means “everyone would lose out,” he said.

Bank governor Andrew Bailey calls the warnings “inflationary alarmism”, dismissing concerns about the dangers of QE. I can reveal that he now faces opposition from the powerful House of Lords Economic Affairs Committee – which will release a report on Friday entitled: “Quantitative Easing – Dangerous Dependence?” “

During their QE investigation, peers heard from central bankers and policymakers around the world, including Bailey himself. This committee includes leading economists, including former Bank Governor Mervyn King.

“We are very concerned about the continued use of QE by the Bank of England – our next report reflects this concern,” a committee source told me. “We question whether the Bank takes inflation risk seriously enough – and argue that it fails to provide rationale for some of its recent findings.”

Between 2009 and 2019, the Bank’s quantitative easing program stood at £ 425 billion, but since 2020 it has risen to £ 875 billion. So we implemented more EQ during this pandemic than during the entire previous decade. Additionally, pre-Covid QE remained largely in the financial system, so it was less inflationary than the last variant – which, as this report makes clear, was used to fund leave and support programs for people. companies.



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