International wrap-up: Bailout for East Europe
Eastern Europe’s battered banking sector got a lifeling of Euro 24.5 billion, with a group of multilateral lenders coming together to lend.
By Sudeshna Sen, ET Bureau |
Bailout for East Europe
Eastern Europe���s battered banking sector got a lifeling of Euro 24.5 billion, with a group of multilateral lenders coming together to lend. The World Bank, the European Bank for Reconstruction and Development, and European Investment Bank jointly announced lending to stabilise the region, as western banks with huge exposures in Eastern Europe face rising problems at home. Ukraine, Hungary and Latvia have also borrowed from the IMF. EIB will provide Euro 11 bn for SMEs, the EBRD with provide Euro 6 bn in a misture of equity and debt, and World Bank will hand our Euro 7.5 bn.
Llloyds Losses
Lloyds Banking Group disappointed the markets today as it failed to reach an agreement with the UK government for putting around GBP 250 billion in toxic assets into the Government���s brand new asset protection insurance scheme. The bank also announced losses of GBP 10.8 bn from taking over the crumbling HBOS last year in a government negotiated deal, though it said its Lloyds TSB part of the business made profits of GBP 807 million. After RBS, Lloyds, which is already about 43% owned by the government, was expected to join the government���s new dumping ground for toxic assets.
More regulation
Amid a national row over pension payments to the former head of Royal Bank of Scotland, the UK Financial Services Authority has issued a code of practice for bank remunerations, which stops short of setting caps banker salaries. The FSA, which has had to admit that it did not really supervise the financial sectors strategy in keeping with the ���light touch��� regulation, has put out a code of practice linking bonuses with profits, not revenues.
It also recommends higher fixed salaries, greater emphasis on risk management, and holding back bonuses until they are proved to be based on business sense. The FSA has also indicated that more stringent norms are in the pipeline that will put curbs on proprietary trading by banks, as part of a major overhaul of the regulatory structure. FSA rules will apply to all financial firms in UK, including overseas arms.
Eastern Europe���s battered banking sector got a lifeling of Euro 24.5 billion, with a group of multilateral lenders coming together to lend. The World Bank, the European Bank for Reconstruction and Development, and European Investment Bank jointly announced lending to stabilise the region, as western banks with huge exposures in Eastern Europe face rising problems at home. Ukraine, Hungary and Latvia have also borrowed from the IMF. EIB will provide Euro 11 bn for SMEs, the EBRD with provide Euro 6 bn in a misture of equity and debt, and World Bank will hand our Euro 7.5 bn.
Llloyds Losses
Lloyds Banking Group disappointed the markets today as it failed to reach an agreement with the UK government for putting around GBP 250 billion in toxic assets into the Government���s brand new asset protection insurance scheme. The bank also announced losses of GBP 10.8 bn from taking over the crumbling HBOS last year in a government negotiated deal, though it said its Lloyds TSB part of the business made profits of GBP 807 million. After RBS, Lloyds, which is already about 43% owned by the government, was expected to join the government���s new dumping ground for toxic assets.
More regulation
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Amid a national row over pension payments to the former head of Royal Bank of Scotland, the UK Financial Services Authority has issued a code of practice for bank remunerations, which stops short of setting caps banker salaries. The FSA, which has had to admit that it did not really supervise the financial sectors strategy in keeping with the ���light touch��� regulation, has put out a code of practice linking bonuses with profits, not revenues.
It also recommends higher fixed salaries, greater emphasis on risk management, and holding back bonuses until they are proved to be based on business sense. The FSA has also indicated that more stringent norms are in the pipeline that will put curbs on proprietary trading by banks, as part of a major overhaul of the regulatory structure. FSA rules will apply to all financial firms in UK, including overseas arms.
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