are also giving us bungs, in addition to the EFSF money.
It seems a little odd to me.
So what is the 25 bn of non-domestic bank debt on repo at the ECB?
Could it be UK and Swedish?
Or could there be some derivative counterparties that are accounting for big losses?
It all smells a little odd.
jmc
November 21, 2010, 11:06pm
#2
yoganmahew:
are also giving us bungs, in addition to the EFSF money.
It seems a little odd to me.
So what is the 25 bn of non-domestic bank debt on repo at the ECB?
Could it be UK and Swedish?
Or could there be some derivative counterparties that are accounting for big losses?
It all smells a little odd.
The UK makes sense. But Sweden? The Swedish fiance minister has a pony tale and looks like a principal for a hedge fund or web 2.0 start up. Too trendy by half. I wonder has there been much of a carry trade in Swedish kriona and they are afraid of a rapid unwind or an unexpected credit event?
If you assume that the contributing countries are acting in their own self-interests, it all makes sense.
Google translation from this mornings Swedish papers
dn.se/ekonomi/irlandskt-eu-k … -1.1212903
For Ireland, the issue of financial assistance has been extremely sensitive. The former Tiger economy has not wanted to humiliate himself and ask for relief - also have been afraid of big loans can be made conditional so that you have to raise its low taxes on corporate profits, for the moment the Irish corporate tax rate of 12.5 percent.
It was unclear Sunday night whether any such conditions have been in Ireland.
Leif Pagrotsky (S), vice chairman of the Riksbank’s General Council, believes that an increase in the Irish corporate tax rate is a prerequisite for Sweden to contribute money.
Much the same reports in the other papers I have checked.
thelocal.se/30358/20101122/
Sweden could lend Ireland, which is negotiating a debt rescue deal, up to 10 billion kronor ($1.46 billion), Swedish Finance Minister Anders Borg said Monday.
A Swedish loan to Ireland would be given in addition to funds the country gets from the International Monetary Fund (IMF) and the European Union.
“We are offering a loan similar to those given to Iceland and Latvia,” Borg told Swedish public radio," adding that loans to those countries during the global financial crisis amounted to between five and 10 billion kronor.
Borg said “no final decision has been taken on the amount of the loan but the contribution could be at the same level as the loans to Iceland and Latvia.”
He added the loan to Ireland would carry an interest rate of about three percent.
“Sweden is a small country dependent on exports, so stability is crucial to us,” Borg said.
Sweden, a member of the EU but not of the single currency eurozone, said late Sunday it would consider a loan to Ireland but did not specify the amount.
The Scandinavian country’s public finances are among the healthiest in the European Union and the government is forecasting growth of almost five percent this year.
A Swedish loan to Ireland would need to be approved by parliament, Borg said.
Britain said Monday it was considering a loan to Ireland of about £7 billion ($11.2 billion) as part of an international rescue.
It will also lend to Ireland via the EU/IMF bailout.
The EU and IMF accepted on Sunday Ireland’s request for a bailout estimated at up to €90 billion ($123 billion) to stabilise the country’s debt-stricken banking system and restore its strained public finances.
3% would be good!
““Sweden is a small country dependent on exports, so stability is crucial to us,” Borg said.”
jmc
November 22, 2010, 5:33pm
#7
yoganmahew:
3% would be good!
““Sweden is a small country dependent on exports, so stability is crucial to us,” Borg said.”
Have the Danes said anything? They are also a small country dependent on exports.
George Osburne speech… “Ireland is a friend in need”… much prefer the placebo song… “a friend in need’sa friend indeed, a friend with weed is better”!
jmc
November 22, 2010, 6:13pm
#9
yoganmahew:
3% would be good!
““Sweden is a small country dependent on exports, so stability is crucial to us,” Borg said.”
If the UK and Svg charge the ECB rate of 5% it might be a nice little money maker…
ftalphaville.ft.com/blog/2010/11/22/412671/anglo-irish-carry-trade-ahoy/
Simple carry trade, borrow at 3% lend at 5%.
Denmark has now confirmed that they will make a loan to Ireland but no figure given.
epn.dk/okonomi2/article2254951.ece
Google translation
McQueen
November 23, 2010, 1:11pm
#11
jmc:
yoganmahew:
3% would be good!
““Sweden is a small country dependent on exports, so stability is crucial to us,” Borg said.”
If the UK and Svg charge the ECB rate of 5% it might be a nice little money maker…
ftalphaville.ft.com/blog/2010/11/22/412671/anglo-irish-carry-trade-ahoy/
Simple carry trade, borrow at 3% lend at 5%.
Its even better than that. The UK borrows at 1.5% for 3 years!
For 7Billion…UK get no default on their banks exposure and they get interest payments from ireland with capital backed by EUIMF. Smart move from them to make such a bilat loan.
Around two years ago, on some forum or other, I ventilated the suggestion of establishing a Union of the North Western Isles which would act as a counterbalance to the continental block led by the Franco-German axis.
I am glad to see that the UK and Swedish leadership took my proposal seriously.
