BNP Paribas - Not Learning the Lessons

princeofpounds

Banks often own large amount of their own domestic sovereign bonds for all sorts of reasons, some normal and some not. These include:

- Fulfilling a primary dealer function on the sovereign bonds, which typically requires a minimum bid in each auction.
- Most assets and liabilities are likely to be in the domestic currency. Bond books are often used for various treasury functions like asset-liability matching. It's no use buying polish bonds with your surplus spanish liquidity if you are already at FX exposure limits.
- political pressure - yes, it does happen. Governments repress the banks far more than people think (google financial repression). Most really emerging market banking systems effectively only borrow from the population and lend to the government and many of the developed economies have stepped back into that world.
- conditional funding; central bank liquidity provision saves you, but requires you to buy only these assets, to save the govt's finances too!
- regulatory rules. Govt bonds are deemed to be 'safe' even if in reality they are not, so various risk-weighted exposure limits set by regulators can force bond-holding.

etc etc

Generali

princeofpounds wrote: »

Banks often own large amount of their own domestic sovereign bonds for all sorts of reasons, some normal and some not. These include:

- Fulfilling a primary dealer function on the sovereign bonds, which typically requires a minimum bid in each auction.
- Most assets and liabilities are likely to be in the domestic currency. Bond books are often used for various treasury functions like asset-liability matching. It's no use buying polish bonds with your surplus spanish liquidity if you are already at FX exposure limits.
- political pressure - yes, it does happen. Governments repress the banks far more than people think (google financial repression). Most really emerging market banking systems effectively only borrow from the population and lend to the government and many of the developed economies have stepped back into that world.
- conditional funding; central bank liquidity provision saves you, but requires you to buy only these assets, to save the govt's finances too!
- regulatory rules. Govt bonds are deemed to be 'safe' even if in reality they are not, so various risk-weighted exposure limits set by regulators can force bond-holding.

etc etc

All absolutely correct IMV. Still, if I held 7% of outstanding Belgian Govies I'd be feeling a bit twitchy.

Generali

Masomnia wrote: »

Kim Clijsters. Think I've spelt that correctly!

I'm not convinced about the inventor of socks either, but I would like to hear more about Stefania Olkiovic.

She's a lovely woman although well into her 90s now of course. I've got her phone number somewhere: she loves 'meeting' new people.

dryhat

Generali wrote: »

She's a lovely woman although well into her 90s now of course. I've got her phone number somewhere: she loves 'meeting' new people.

Make up a character, build the story, hope it goes viral.
Set up a sock museum somewhere with some old dear as the inventor.
Charge entry, sell souveniers, etc etc
Make a fortune.

I like your style Gen.


Count me in for the haircut blag.

Generali

dryhat wrote: »

Make up a character, build the story, hope it goes viral.
Set up a sock museum somewhere with some old dear as the inventor.
Charge entry, sell souveniers, etc etc
Make a fortune.

I like your style Gen.


Count me in for the haircut blag.

Perhaps we can revitalize the Cyprus economy with the haircut thing.

dryhat

Generali wrote: »

Perhaps we can revitalize the Cyprus economy with the haircut thing.

We need a brand name for our haircut.


"brazilian" is taken, so how about "venezualan"

Thrugelmir

dryhat wrote: »

We need a brand name for our haircut.


"brazilian" is taken, so how about "venezualan"

A Russian.

Urban dictionary definition.

When a male bites the females pubic hair off with his teeth

:eek:

BobQ

Thrugelmir wrote: »

Figures that caught my eye.

SANTANDER

There's a bank totally exposed to a single market.

No wonder they are pulling back on UK lending.

So how does the alleged partitioning of the Spanish and UK parts of SANTANDER work?

Thrugelmir

BobQ wrote: »

So how does the alleged partitioning of the Spanish and UK parts of SANTANDER work?

UK operation is required to maintain capital solvency etc under FSA rules.

Santander UK is pro-actively seeking to increase business lending at expense of mortgages. As requires less capital to operate. Any freed up capital can then freely be returned home.

Days of UK expansion appear to be over.

Generali

dryhat wrote: »

We need a brand name for our haircut.


"brazilian" is taken, so how about "venezualan"

A German.....?