22 Jan 2012: Greek debt-holders face additional losses

FTSE 100 5729 Down 22bp
S&P 500 1315 Up 7bp
NIFTY 50 India 5048 Up 60bp

Major Stories

  • Greece Bondholders face additional losses
    • Last-ditch talks on restructuring Greek debt have had an unexpected outcome that private bondholders will take additional losses
    • Officials from ECB and IMF called for lower interest rates averaging 3.5% after private bondholders had already agreed on 4% coupons earlier
    • Extra interest cut will push value losses for bondholder from 68% to 70%, a level which might be unacceptable for institutions voluntarily
    • The Greek economy shrank 6% in 2011, as compared with a forecast of 3.8%
  •  UK banks targeted on mis-selling scandal
    • City Regulator is pressing banks to cut bonuses to reflect losses triggered by mis-sold loan insurance
    • FSA labels this as ‘worst consumer scandal in decades’ and urges banks to not reward bankers for a ‘failure’
    • UK’s five biggest lenders took charges totalling £5bn for their practice of providing loan insurance to people who did not need or want protection
  •  Monti unveils liberalisation plans
    • Italy’s Govt finalises liberalisation plans; Monti blames the slowing down of economy on ‘insufficient competition, inadequate infrastructure and complicated admin procedures’
    • Taxi drivers and truck drivers have been protesting; Pharmacists, and lawyers also plan to resist to opening up of competition in their professions
    • The package also targets gas and electricity markets, insurance sector and local public services and also includes Euro 5bn of infrastructure spending

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