This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.theguardian.com/business/live/2016/dec/07/italian-banks-monte-de-paschi-renzi-markets-bonds-business-live
The article has changed 16 times. There is an RSS feed of changes available.
| Version 10 | Version 11 |
|---|---|
| UK manufacturing slides, as Italian bank rescue hopes build – business live | UK manufacturing slides, as Italian bank rescue hopes build – business live |
| (35 minutes later) | |
| 3.02pm GMT | |
| 15:02 | |
| Renzi set to resign as Italian PM | |
| Well it seems Matteo Renzi will not be staying on as Italian prime minister after all and plans to resign this evening now the budget has been passed. He tweeted: | |
| Legge di bilancio approvata. Alle 19 le dimissioni formali. Grazie a tutti e viva l'Italiahttps://t.co/PLsLxcrPGS | |
| AP reports: | |
| Italian Premier Matteo Renzi says he’ll resign now that Parliament has completed approval of the 2017 national budget. | |
| Renzi had offered his resignation two days earlier to President Sergio Mattarella following his humiliating defeat in a government-backed voter referendum on reforms. | |
| But Mattarella told him to stay in office until passage of the budget law, which was done Wednesday afternoon. | |
| Renzi tweeted that he plans to go to the president to resign at 7 p.m. (1800 GMT). | |
| Updated | |
| at 3.09pm GMT | |
| 3.00pm GMT | |
| 15:00 | |
| UK economic growth flat, says NIESR | |
| Following the poor UK manufacturing figures earlier, comes news that the economy’s growth has flattened in the last few weeks, according to a leading think tank. | |
| The National Institute of Economic and Social Reseach has estimated that UK output grew by 0.4% in the three months to the end of November, the same as in the three months to October. But it warned a slowdown was ahead. | |
| The think tank said the economy was being supported by the service sector, which was borne out by the earlier weak manufacturing figures. Rebecca Piggott, research fellow at NIESR, said: | |
| Recent economic growth has been driven almost entirely by the UK’s broad service sector, supported by robust consumer spending. In stark contrast, the official figures suggest that the production and construction sectors of the economy have declined over recent months. | |
| Looking ahead, we do not expect such buoyant consumer spending growth to persist. Sterling’s pronounced depreciation this year is expected to pass through to the consumer prices throughout the course of 2017 and 2018, eroding the purchasing power of households substantially. | |
| NIESR’s latest quarterly forecast published just over a month ago forecast GDP growth of 2% per annum in 2016 and 1.4% in 2017. CPI inflation was expected to reach 3.8% at the end of 2017. | |
| Updated | |
| at 3.03pm GMT | |
| 2.49pm GMT | |
| 14:49 | |
| Another area likely to be hit by the uncertainty of the UK leaving the EU is the Irish banking sector, according to ratings agency Fitch. It said: | |
| Fitch Ratings has revised the 2017 sector outlook for Irish banks to stable from positive, as the UK’s vote to leave the EU increases uncertainty for the operating environment. Ireland’s economic recovery should remain strong in the short term, underpinning the stable sector outlook. The rating outlook on Irish banks is positive, reflecting our expectation that improving bank credit fundamentals should outweigh these challenges. | |
| Brexit is negative for Ireland’s long-term economic and political prospects, putting pressure on GDP growth and creating uncertainty around relations with Northern Ireland. The extent of any weakening of the bank operating environment, triggered by a slowdown of GDP growth in the UK, sterling depreciation, or potential trade barriers, will become clear only as EU-UK negotiations develop. A deterioration in the operating environment could slow any improvements in the asset quality and capitalisation of Irish banks... | |
| Capitalisation, although improving, remains vulnerable. We expect capital ratios to strengthen in 2017, despite pressure from volatility in pension fund deficits and foreign-exchange markets. Fully-loaded regulatory capital ratios remain weaker than international peers, primarily due to large amounts of deferred tax assets; these assets are reducing slowly because of Ireland’s low corporate tax rate and relatively low levels of profitability compared to the size of the balance sheet. Large, albeit reducing, stocks of unreserved problem assets also leave Irish banks’ capitalisation more exposed if the operating environment deteriorates. | |
| Further improvements in asset quality and capitalisation would improve the banks’ risk profiles and may result in ratings upgrades; this is why the ratings outlook for Irish banks is positive. Although uncertainty as regards the operating environment has increased, we believe credit fundamentals will improve in 2017, as the sector continues to work through its backlog of impaired loans. | |
| 2.24pm GMT | 2.24pm GMT |
| 14:24 | 14:24 |
| But... Bloomberg is reporting that Renzi might be having second thoughts about stepping down. | But... Bloomberg is reporting that Renzi might be having second thoughts about stepping down. |
| They say: | They say: |
| Matteo Renzi is wavering on whether to stay on as Italian prime minister despite his resignation offer after Sunday’s referendum defeat, according to a senior state official. | Matteo Renzi is wavering on whether to stay on as Italian prime minister despite his resignation offer after Sunday’s referendum defeat, according to a senior state official. |
| President Sergio Mattarella wants Renzi to reconsider his decision in order to provide political and economic stability, said the official, who asked not to be named because the issue is confidential. | President Sergio Mattarella wants Renzi to reconsider his decision in order to provide political and economic stability, said the official, who asked not to be named because the issue is confidential. |
| Here’s the full story. | Here’s the full story. |
| 1.52pm GMT | 1.52pm GMT |
| 13:52 | 13:52 |
| 1.28pm GMT | 1.28pm GMT |
| 13:28 | 13:28 |
| Italian senate approves 2017 budget | Italian senate approves 2017 budget |
| Newsflash! After a debate today. the Italian Senate just approved the country’s 2017 budget. | Newsflash! After a debate today. the Italian Senate just approved the country’s 2017 budget. |
| That’s the last order of business before Matteo Renzi can formally step down as prime minister. | That’s the last order of business before Matteo Renzi can formally step down as prime minister. |
| ITALY SENATE VOTED 173 VS 108 IN FAVOR OF GOVT ON BUDGET LAW | ITALY SENATE VOTED 173 VS 108 IN FAVOR OF GOVT ON BUDGET LAW |
| Renzi now also expected to meet with senior members of his Democratic Party this afternoon, to discuss the next steps - including whether he remains as party leader. | Renzi now also expected to meet with senior members of his Democratic Party this afternoon, to discuss the next steps - including whether he remains as party leader. |
| Updated | Updated |
| at 1.28pm GMT | at 1.28pm GMT |
| 12.26pm GMT | 12.26pm GMT |
| 12:26 | 12:26 |
| Back in the markets, European stocks are hitting multi-month highs on continued optimism that Italy’s banking sector will receive much-needed fresh capital soon. | Back in the markets, European stocks are hitting multi-month highs on continued optimism that Italy’s banking sector will receive much-needed fresh capital soon. |
| Every index is sharply higher today, with some traders speculating that the fabled “Santa Rally” might be kicking off (stock markets often rally in the run-up to Christmas). | Every index is sharply higher today, with some traders speculating that the fabled “Santa Rally” might be kicking off (stock markets often rally in the run-up to Christmas). |
| Over in Milan, Monte dei Paschi is still having a good day, up 8%, following the reports that the Italian government could take a €2bn stake in the bank. | Over in Milan, Monte dei Paschi is still having a good day, up 8%, following the reports that the Italian government could take a €2bn stake in the bank. |
| Banca Monte Paschi waking up this morning... pic.twitter.com/f61XIbLsqM | Banca Monte Paschi waking up this morning... pic.twitter.com/f61XIbLsqM |
| And the suggestions that Rome could turn to the ESM for a €15bn bank bailout continues to calm fears of an imminent financial crisis. | And the suggestions that Rome could turn to the ESM for a €15bn bank bailout continues to calm fears of an imminent financial crisis. |
| Kathleen Brooks of City Index says: | Kathleen Brooks of City Index says: |
| Even the prospect of a nationalisation [of Monte dei Paschi], potentially as early as this weekend, isn’t spooking the markets as it may avoid retail bondholders having to take any losses. | Even the prospect of a nationalisation [of Monte dei Paschi], potentially as early as this weekend, isn’t spooking the markets as it may avoid retail bondholders having to take any losses. |
| The FTSE 100 index is now up by 100 points, or 1.5% at 6880 -- a chunky rise. However, that’s partly because the pound fell at 9.30am when October’s weak UK manufacturing data were released. | The FTSE 100 index is now up by 100 points, or 1.5% at 6880 -- a chunky rise. However, that’s partly because the pound fell at 9.30am when October’s weak UK manufacturing data were released. |
| The German Dax is still at a one-year high, the French CAC is at its highest level since January, and Italy’s FTSE MIB it at its highest level since June. | The German Dax is still at a one-year high, the French CAC is at its highest level since January, and Italy’s FTSE MIB it at its highest level since June. |
| 11.45am GMT | 11.45am GMT |
| 11:45 | 11:45 |
| EC antitrust commissioner Margrethe Vestager declined to comment directly on the Monte dei Paschi rescue talks. | EC antitrust commissioner Margrethe Vestager declined to comment directly on the Monte dei Paschi rescue talks. |
| But she did point out that the commission is keen to support citizens who have been missold financial products. | But she did point out that the commission is keen to support citizens who have been missold financial products. |
| That could be significant, as the small retail investors who own Italian bank bonds may argue that they were deceived about the risk of being possibly ‘bailed into’ a rescue. And some analysts reckon the Italian government could circumvent those new bail-in rules by compensating these small investors. | That could be significant, as the small retail investors who own Italian bank bonds may argue that they were deceived about the risk of being possibly ‘bailed into’ a rescue. And some analysts reckon the Italian government could circumvent those new bail-in rules by compensating these small investors. |
| Vestager told reporters in Brussels that: | Vestager told reporters in Brussels that: |
| “One of the things that we are working with is tools to enable governments to compensate for mis-selling of different kinds. | “One of the things that we are working with is tools to enable governments to compensate for mis-selling of different kinds. |
| “It is something we have set up before. We will work with governments again if they want to set up schemes that can allow citizens to be compensated if mis-selling has been taking place.” | “It is something we have set up before. We will work with governments again if they want to set up schemes that can allow citizens to be compensated if mis-selling has been taking place.” |
| 11.14am GMT | 11.14am GMT |
| 11:14 | 11:14 |
| JP Morgan and HSBC also reject Euribor findings | JP Morgan and HSBC also reject Euribor findings |
| The European Commission have got a fight on their hands over today’s Euribor fines. | The European Commission have got a fight on their hands over today’s Euribor fines. |
| JP Morgan and HSBC have both announced that reject the EC’s conclusions that they breached antitrust laws, and will fight on to try to prove it. | JP Morgan and HSBC have both announced that reject the EC’s conclusions that they breached antitrust laws, and will fight on to try to prove it. |
| A spokeswoman for JP Morgan (fined €337m today) says the bank could launch an appeal: | A spokeswoman for JP Morgan (fined €337m today) says the bank could launch an appeal: |
| “We have cooperated fully with the European Commission throughout its five year investigation. We did not engage in any wrongdoing with respect to the EURIBOR benchmark. | “We have cooperated fully with the European Commission throughout its five year investigation. We did not engage in any wrongdoing with respect to the EURIBOR benchmark. |
| We will continue to vigorously defend our position against these allegations, including through possible appeals to the European courts.” | We will continue to vigorously defend our position against these allegations, including through possible appeals to the European courts.” |
| HSBC (fined €33m) is also adamant that it didn’t take part in a cartel: | HSBC (fined €33m) is also adamant that it didn’t take part in a cartel: |
| The European Commission’s decision relates to allegations of Euribor manipulation and related purported conduct during the course of one month in early 2007. We believe we did not participate in an anti-competitive cartel. We are reviewing the European Commission’s decision and considering our legal options. | The European Commission’s decision relates to allegations of Euribor manipulation and related purported conduct during the course of one month in early 2007. We believe we did not participate in an anti-competitive cartel. We are reviewing the European Commission’s decision and considering our legal options. |
| Updated | Updated |
| at 11.15am GMT | at 11.15am GMT |
| 10.56am GMT | 10.56am GMT |
| 10:56 | 10:56 |
| Credit Agricole to appeal Euribor ruling | Credit Agricole to appeal Euribor ruling |
| French bank Credit Agricole is refusing to accept that it breached antitrust rules! | French bank Credit Agricole is refusing to accept that it breached antitrust rules! |
| In a short, sharp statement, it says: | In a short, sharp statement, it says: |
| Crédit Agricole takes note of today’s decision of the European Commission in the Euribor case. | Crédit Agricole takes note of today’s decision of the European Commission in the Euribor case. |
| Crédit Agricole firmly believes that it did not infringe competition law. Accordingly, it will appeal the Commission’s decision before the European courts. | Crédit Agricole firmly believes that it did not infringe competition law. Accordingly, it will appeal the Commission’s decision before the European courts. |
| Payment of the fine will not affect the 2016 financial statements given the provisions set aside previously. | Payment of the fine will not affect the 2016 financial statements given the provisions set aside previously. |
| 10.16am GMT | 10.16am GMT |
| 10:16 | 10:16 |
| Today’s fines mark the end of the euribor scandal, hopefully, Vestager continues. | Today’s fines mark the end of the euribor scandal, hopefully, Vestager continues. |
| But.... | But.... |
| The Commission will not hesitate to investigate and sanction any other cartel it may uncover in the future in the financial industry. | The Commission will not hesitate to investigate and sanction any other cartel it may uncover in the future in the financial industry. |
| 10.14am GMT | 10.14am GMT |
| 10:14 | 10:14 |
| Commissioner Vestager is outlining the euribor ruling now. | Commissioner Vestager is outlining the euribor ruling now. |
| You can watch it live here. | You can watch it live here. |
| She says JP Morgan, HSBC and Credit Agricole all breached antitrust rules by conspiring to rig the euribor rate. | She says JP Morgan, HSBC and Credit Agricole all breached antitrust rules by conspiring to rig the euribor rate. |
| The euribor market is means to provide protection from market volatility in euro-denominated securities, Vestager says. If this market is rigged, it will benefit only a few. | The euribor market is means to provide protection from market volatility in euro-denominated securities, Vestager says. If this market is rigged, it will benefit only a few. |
| Traders used IM services and corporate chatrooms to exchange confidential information to distort the euribor rate to serve their own interests, she adds. | Traders used IM services and corporate chatrooms to exchange confidential information to distort the euribor rate to serve their own interests, she adds. |
| Euribor was calculated from submissions from individual banks, which created the ability to rig it. | Euribor was calculated from submissions from individual banks, which created the ability to rig it. |
| Vestager cites one example, from 19th March 2007, in which the cartel members decided they would benefit from a lower euribor rate. So, weeks earlier, they conspired to submit low numbers to the committee which calculated the daily figure. | Vestager cites one example, from 19th March 2007, in which the cartel members decided they would benefit from a lower euribor rate. So, weeks earlier, they conspired to submit low numbers to the committee which calculated the daily figure. |
| (this will sound depressingly familiar to anyone who’s read about the Libor scandal). | (this will sound depressingly familiar to anyone who’s read about the Libor scandal). |
| Updated | Updated |
| at 10.14am GMT | at 10.14am GMT |
| 10.07am GMT | 10.07am GMT |
| 10:07 | 10:07 |
| Here’s the details of the euribor-rigging fines just announced by the EC. | Here’s the details of the euribor-rigging fines just announced by the EC. |
| Margrethe Vestager, the EU’s antitrust commissioner, says: | Margrethe Vestager, the EU’s antitrust commissioner, says: |
| “Banks have to respect EU competition rules just like any other company operating in the single market.” | “Banks have to respect EU competition rules just like any other company operating in the single market.” |
| These fines come three years after four other banks were fined over Euribor rigging, Barclays, Deutsche Bank, RBS and Societe Generale. | These fines come three years after four other banks were fined over Euribor rigging, Barclays, Deutsche Bank, RBS and Societe Generale. |
| Updated | Updated |
| at 10.08am GMT | at 10.08am GMT |
| 10.02am GMT | 10.02am GMT |
| 10:02 | 10:02 |
| Crédit Agricole, HSBC and JP Morgan fined over Euribor scandal | Crédit Agricole, HSBC and JP Morgan fined over Euribor scandal |
| Newsflash! The European commission has fined Cr´dit Agricole, HSBC and JP Morgan a combined total of €485m for their role in the Euribor fixing scandal. | Newsflash! The European commission has fined Cr´dit Agricole, HSBC and JP Morgan a combined total of €485m for their role in the Euribor fixing scandal. |
| This is the case in which traders were accused of conspiring to rig the official rates at which banks would lend to each other in various currencies (euros, in this case) | This is the case in which traders were accused of conspiring to rig the official rates at which banks would lend to each other in various currencies (euros, in this case) |
| More to follow.... | More to follow.... |
| Updated | Updated |
| at 10.16am GMT | at 10.16am GMT |
| 9.49am GMT | 9.49am GMT |
| 09:49 | 09:49 |
| City experts are pretty unimpressed by the slide in UK manufacturing in October: | City experts are pretty unimpressed by the slide in UK manufacturing in October: |
| Ugh! October UK ind. production was worst month since September 2012, falling 1.3%m/m. -8.6%m/m plunge in mining & -0.9%m/m in manufacturing pic.twitter.com/nEawxnV39X | Ugh! October UK ind. production was worst month since September 2012, falling 1.3%m/m. -8.6%m/m plunge in mining & -0.9%m/m in manufacturing pic.twitter.com/nEawxnV39X |
| Despite better surveys, #UK manufacturing remained very weak in October despite weaker #GBP. May's #Brexit plan is to make it great again... pic.twitter.com/M22vIRpMPp | Despite better surveys, #UK manufacturing remained very weak in October despite weaker #GBP. May's #Brexit plan is to make it great again... pic.twitter.com/M22vIRpMPp |
| 9.44am GMT | 9.44am GMT |
| 09:44 | 09:44 |
| That disappointing UK manufacturing report has hit the pound, sending it down 0.5% against the US dollar: | That disappointing UK manufacturing report has hit the pound, sending it down 0.5% against the US dollar: |
| Pound falls to $1.26 after manufacturing output unexpectedly drops, by 0.9% https://t.co/5LG42Arn5o pic.twitter.com/3ng0Tr5F3s | Pound falls to $1.26 after manufacturing output unexpectedly drops, by 0.9% https://t.co/5LG42Arn5o pic.twitter.com/3ng0Tr5F3s |
| The Office for National Statistics reports that most areas of manufacturing struggled in October, led by pharmaceuticals, where output shrank by 3.6%. | The Office for National Statistics reports that most areas of manufacturing struggled in October, led by pharmaceuticals, where output shrank by 3.6%. |
| 9.40am GMT | 9.40am GMT |
| 09:40 | 09:40 |
| This chart shows how Britain’s manufacturing sector weakened in October, after two months of gains: | This chart shows how Britain’s manufacturing sector weakened in October, after two months of gains: |
| UK manufacturing output fell 0.9% in October 2016 vs September & was 0.4% lower than a year ago.#ukmanufacturinghttps://t.co/aqSS1d7cve pic.twitter.com/LejkS32iYs | UK manufacturing output fell 0.9% in October 2016 vs September & was 0.4% lower than a year ago.#ukmanufacturinghttps://t.co/aqSS1d7cve pic.twitter.com/LejkS32iYs |
| Not so good. UK Manufacturing month on same month a year ago decreased by 0.4% in October 2016. | Not so good. UK Manufacturing month on same month a year ago decreased by 0.4% in October 2016. |
| 9.37am GMT | 9.37am GMT |
| 09:37 | 09:37 |
| UK industrial production takes a tumble in October | UK industrial production takes a tumble in October |
| Breaking: Britain’s industrial sector has suffered its biggest fall in output sine 2012. | Breaking: Britain’s industrial sector has suffered its biggest fall in output sine 2012. |
| UK industrial production shrank by 1.3% in October, dashing hopes of a 0.2% rise. | UK industrial production shrank by 1.3% in October, dashing hopes of a 0.2% rise. |
| It’s partly due to the temporary shutdown of the Buzzard oil field in the North Sea. | It’s partly due to the temporary shutdown of the Buzzard oil field in the North Sea. |
| But... manufacturing certainly had a poor month too. Output across manufacturing firms fell by 0.9% in October. That’s the weakest performance since February, and will raise fears that the economy is weakening. | But... manufacturing certainly had a poor month too. Output across manufacturing firms fell by 0.9% in October. That’s the weakest performance since February, and will raise fears that the economy is weakening. |
| Economist Mark Astley says the figures are much weaker than expected. | Economist Mark Astley says the figures are much weaker than expected. |
| UK #manufacturing & ind product much weaker than expected in Oct (-0.9%,-1.3% m/m; -0.4%,-1.1% y/y) #PMI giving false post #brexit picture? | UK #manufacturing & ind product much weaker than expected in Oct (-0.9%,-1.3% m/m; -0.4%,-1.1% y/y) #PMI giving false post #brexit picture? |
| Investec’s Philip Shaw hopes that the underlying picture is better. | Investec’s Philip Shaw hopes that the underlying picture is better. |
| UK manufacturing output down 0.9% in Oct. Note that surveys of the sector have been positive and so this is likely to be an erratic number. | UK manufacturing output down 0.9% in Oct. Note that surveys of the sector have been positive and so this is likely to be an erratic number. |