Lithuania’s central bank said on Wednesday it had ordered the country’s sixth-largest bank, Snoras, to raise capital and imposed limits on its risk-taking… Snoras had to shore up capital to cushion risks, mainly from operations with non-residents, but the bank was stable… A Snoras bank spokesman said the bank’s capital adequacy ratio was 8.42 percent at the end of the second quarter, compared to the minimum requirement of 8.0 percent.
Oops. 8.42 means should the bank’s equity decline 5%, it will brake the minimum requirement. In the last 12 month Snoras lost 9.32mn litas or 1.6% of equity. More to follow.
New York state made claim for $1.2 billion in taxes, interest and penalties from Lehman Brothers Holdings Inc. The state is seeking payment for tax bills dating to 1994, according to the claim form.
Bad luck. Would the head reached out Lehman as they did Goldman, they would have been received at least $1.2bn. Goldman Sachs paid $568m in taxes during the last 13 months. However, it obtained $13bn via AIG and $10bn from the government to keep going, making Goldman’s tax paid equal to 2.5% of the total sum. Not the best return on investment. Efficiency, efficiency, efficiency…
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It is easy to participate. You only need to select one of six cells on a lottery ticket to find how much additional interest will be assigned to your deposit. The lucky number will be added to your specific saving account.
Voila! Lithuanian banks have officially started playing games. If you have lost money in one of Danske funds you can try your luck with their new entertainment. At least you will be able to experience some honored pleasure now if you didn’t try their magic deposit two years before. So what are you offered?
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Aaron Russo – a film maker, political activist and conspiracy theorist. Some of his theses caught my eye, reminding “The Sims” video game. You may get familiar with them in this video.
11:23 Retroactive laws and whether to pay an income tax
16:10 In democracy 51% of the people controls 49% of the people
22:42 Rockefellers’ and banks manifesto
51:10 Money machine, debt, inflation, 1913
1:06:40 Carbon taxes monopoly
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Swedbank and Latvia are major friends today. If you listen to someone speaking about Latvia just wait a few moments and you will enjoy expressions about Swedbank. Or other way, if someone is articulating about Swedbank, she will certainly stick few words about Latvia. Causality is uncertain but base is obvious: Swedbank and Latvia are major problems of each other. Latvian currency is losing value, Swedbank – confidence.
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Panic has started.
Discussed by John Hempton in Bronte Capital, Baltic banks are insolvent. The reasoning is the following:
Well if the Lati devalues (as would seem inevitable) then Hansa Bank has to pay Euro to Swedbank – and as its assets are in Lati it would be insolvent.
If the Lati doesn’t devalue its only because people (ie Swedbank) are prepared to continue to fund it. This is not pretty at all. All in Hansa owes Swedbank over 30 billion Swedish Kroner – all denominated in Euro and which can’t be paid. The equity capital of Hansa (roughly 7 billion Swedish Kroner) is also going to default.
To protect Baltic economies, firstly, central banks should have enough willingness and reserves to long Baltic currency and short Euro with gold. While the rest of the world is doing vice a versa. Any thoughts who is able to spend more capital: hedge funds or Baltic central banks?
Secondly, people must inject more Euros to Hansabank, SEB and other banks to diminish their loan-to-deposit ratios and make shareholders of Swedbank calm. Any one is willing to buy litas or kronas from the bank and give them all your Euro savings?
Yes, we do! Banks have been clever enough to hedge their currency risks by lending in Euro to residents of Baltic States. And we have been borrowing in Euro, protecting banks and exposing our own assets. The great scheme that has been working until recently, when borrowing capacity was more or less sustainable.
Today, it’s not true. Banks’ credit risks are topping due to bad loans coming from the Baltics. Inflation does not allow to reduce interest on domestic currency denominated loans and decrease demand for Euro. People do not funds banks anymore. Contracting GDP growth is pushing away foreign investors. Consequently, to make their shareholders calm, both Swedbank and SEB should closed down their Baltic branches. Until they will be forced to.
After spending some time on Delfi, I have once again faced an eye catching idea: Sampo Bank (one of the banks, operating in the Baltic states) offers its clients an amazing 18% annual rate on their half-year deposits, while regular time deposits for the same period earn around 4.3%. However, as a rule, there also should be some nasty things, which the bank takes for additional privileges it grants. And I was prepared for that. This time, it was an obligation to invest 75% of your portfolio in Danske Fund Global Emerging Markets, and the rest into the amazing deposit.
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