Debt Management
BoJ on dollar’s “exorbitant privilege”
Bank of Japan research notes that with great privilege comes great responsibility
Portuguese debt office agrees to post collateral to its dealers
Agency becomes one of first developed-market sovereigns to succumb to dealer pressure as costs of one-way collateral postings grow
Greek debt crisis sparks widening of almost all global CDS spreads
Cost of protecting against a Greek default up 190% in three months to mid-June as CDS spreads widened for 93% of sovereign debt on back of sovereign debt crisis in Europe
IMF resumes financial aid to Ukraine
Fund approves new application for loans after funding was cut off in dispute over its burgeoning fiscal deficit
EU faces tough call on sovereign scenarios for stress tests
European Union officials split on whether to run sovereign debt scenarios on stress tests; plans afoot to extend number of banks tested
Caruana’s three policy challenges
Bank for International Settlements’ general manager outlines the key problems with which policymakers must grapple
BIS fearful over fiscal crunch
Bank for International Settlements warns advanced economies that rising debt levels risk hindering long-term performance
CentralBanking.com panel: ECB’s response to Greek crisis too slow
Mike Williams, Paul Mortimer-Lee, and Phil Davis say the ECB should have moved more swiftly to tackle the fiscal problems in Greece
Bank of Canada: foreign US Treasury holders depressed long term yields
A Bank of Canada study into long-term US Treasury yields finds foreign holders absorbed the excess supply of bonds and decreased yields pre-crisis
Shilling weakened after Kenya bought euros, say analysts
Analysts link recent weakness in Kenya’s shilling to euro purchases by the central bank
Maastricht criteria tough enough to contain crisis threat: Cyprus
Central Bank of Cyprus paper finds risk of default zero if debt-to-GDP and primary surplus ratios remain below limits set out in Maastricht Treaty; paper mentions Greece and Italy as states where there is a default risk n
ECB’s Bini Smaghi: Greece cannot default
ECB’s Lorenzo Bini Smaghi says an orderly default is simply not an option to solving Greece’s fiscal burden
Libor climbs as uncertainty in European markets grows
Libor rises to highest in more than ten months as lending in European markets slows down
Dubai World agrees restructuring terms
Government owned investment company agrees the terms of a $23.5 billion restructuring effort with creditors and state; markets welcome news
Central banks in biggest US Treasury sell-off for three years
Federal Reserve data shows foreign holders of US treasuries moved away from the dollar
IMF: fiscal prudence pays in emerging markets
IMF study shows that an improving fiscal position improves sovereign debt grading and reduces financing costs in emerging-market economies.
Senate okays disputed Argentine reserve transfer
Lawmakers in Argentina's upper house approve president’s decree to transfer $4.4 billion of central bank reserves to bond repayment fund
Trichet: economic, not monetary, reform of EMU necessary
ECB president Jean-Claude Trichet calls for broader economic reforms to mend Europe’s Economic Monetary Union (EMU)
Portuguese rating takes double-notch beating
Standard & Poor’s downgrades long-term rating to A- and short-term rating to A-2 on concerns over deteriorating macroeconomic environment, credit default spreads stretch further
ECB: fiscal deficits attributable to crisis
ECB paper shows European fiscal budgets were unprepared for intervening in markets during crisis
Greece’s $40 billion bailout an improvement, but issues remain
Markets soothed as firm details of Greek rescue plan are announced, eurozone will provide €30 billion at discounted 5% rate for year forward, analysts less convinced
Jilted bondholders can attack Argentine central bank’s assets: US court
US judge decrees central bank and government one entity and breaks dam guarding assets from unpaid creditors; central bank expected to appeal ruling
Icesave casts pall over Iceland’s credit outlook
Ratings agency Moody’s kicks its outlook on Iceland down to negative on intractable Icesave dispute, change leaves Icelandic bonds hovering just above junk status
British bonds rest on “a bed of nitroglycerine”: Pimco chief
Head of biggest bond fund sees investors penalising gilts as British attachment to quantitative easing stirs worry that government seeks to inflate debt away