Here's my summary of the key news overnight in 90 seconds at 9 am, including news that just when you thought the Cyprus euro crisis was winding down, a new one is starting - in Slovenia.
True it's not the basket case that Cyprus is, but it's not good either. The banking sector has seen bad debts continue to rise, with non-performing loans in the 20% region.
Most of this is due to non-financial corporates, and ties into another flaw for them. Slovenia has an SOE economy: many of the banks are publicly-owned and the large state-sector is unreformed. Close relationships between the banks and the non-financial sector have undermined risk management and had a detrimental impact on bank balance sheets. Basically it needs a bailout.
These crises undermine the perception of risk for the euro. And that raises the costs of borrowing for sovereigns, especially some of the shaky majors. Spain is now spending 30% of the taxes it collects on debt servicing. Slovenia might be the next, but Spain can't be far behind. And Italy's political crisis deepens. As Mervyn King said very recently, the euro crisis is far from over.
In Britain, regulators have ordered major banks to raise an extra £25 billion in capital.
Everyone is watching with disbelief. Developing nations have decided to do something.
Brazil, Russia, India, China and South Africa approved a US$100 billion fund to combat currency crises, but they failed to reach agreement on financing for a development bank, an institution that would be an alternative to the IMF and World Bank.
In Australia, home buyer confidence has fallen to its lowest level since 2008. And on the banking front, they have decided to scrap their industry-based panel that sets its interbank borrowing rate. Banks are quitting rate-setting panels worldwide and no doubt the NZ Financial Markets Association will need to make a similar change here soon.
The Kiwi dollar starts today marginally lower at 83.6 USc, 80.1 AUc, and the TWI is up at 76.9.
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