外报阅读10精Word文档下载推荐.docx

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Jun24th2010|fromPRINTEDITION

ACCORDINGtotheversionoffinancialhistoryfavouredbyAmerica’sTreasuryandtheFederalReserve,the“stresstests”theydidonbigAmericanbanksinthefirsthalfof2009wereaturning-pointinthecrisis.Byindependentlyexaminingbanks’books,estimatinglosses,makingpublictheresultsandforcingbankstoraisecapital,theyrestoredmarketconfidence.

Realityismorecomplexthanthat—thebail-outsofCitigroupandBankofAmericainearly2009hadjustabittodowithrestoringconfidence,too.EuropeanstendtoviewthetestsasadazzlingpieceofPR,followedbybrazentrumpet-blowing.OnebankersaystheAmericanexperiencewasboth“fantasticandalittledepressing”.Aregulatoragrees:

“Peoplehaveanaiveviewaboutwhatstresstestscandeliver.”

Yetwithfundingmarketsalmostclosedtosomeoftheirbanks,manyEuropeanshavechangedtheirminds.ThedifficultiesofSpanishbanksarewellknown.Portugal’sbankshavealsobeentappingtheEuropeanCentralBank（ECBatafuriouspace.ThereistalkthatthemalaisehasspreadtoItaly.Americansareparticularlyreluctanttolend.HuwvanSteenisatMorganStanleysaysthatmorebanksnowacceptthatanAmerican-stylestresstestmaybeneededtorestoreconfidence.Spainhasbecomeapassionateadvocateandothershavesignedup,too.OnJune17ththeEuropeanUnion’sleadersagreedthatstresstestsshouldbemadepublicinlateJuly.

Thegoodnewsisthataprocessalreadyexistsfordoingstresstests.ThebadnewsisthatitinvolvesthekindofEuropeangroup-hugthatinspiresderision,notconfidence,inhedge-fundmanagers.America’stestswereruninmilitarystylebytheFed,withtheTreasurywritingthecheques.InEuropetheeconomicscenarioisbeingsetbytheECBandtheEuropeanCommission,whichistheninterpretedbytheCommitteeofEuropeanBankingSupervisors（CEBS,aquangoofregulatorsrunwithaskeletalstaff,whichinturnliaiseswithnationalsupervisorsineachcountry.

CEBSdidorganisesometestslastyear,on22banks,buttheresultswerekeptprivate.Ithasjustfinishedgatheringdataon25banksinwhatwasmeanttobejustanotherroutineandconfidentialtest.Thesedatawillformthefoundationofthesouped-uppublicteststhepoliticianswant,althoughmorebankswillbeincluded.YetgiventhestakesandcomparedwiththemightyFed,CEBSisfathomsoutofitsdepth.

Alotdepends,then,onnationalregulators,whichdohaverealmuscleandresources.Butitishardtoavoidtheimpressionofinconsistency.Asupervisorfromamedium-sizedcountrysaysithasplayeda“prettypassive”roleintheCEBStests,withthebanksinterpretingwhatthebroadmacroeconomicscenariomightmean.Inanotherbigcountry,theregulatorsaysitjustpluggedtheCEBSscenariointoitsmodelandsentthemtheresults.Thisisconcerning.DanielTarullo,aFedgovernor,

recentlyemphasisedthatsomeAmericanbanksweren’tmuchgoodatdoingstresstestsontheirownandthatsupervisors’judgment,notjustmodels,wasvital.ThetestsarebeingtakenseriouslybyregulatorsinFranceandSpain,atleast,whichcouldpressureotherstofollowsuit.

ThatstillleavesthedelicateissueofhowtofactorinEurope’ssovereign-debtjitters.Thetestsareunlikelytoassumeasovereigncollapse,withthepossibleexceptionofGreece.Imagininganythingworsewouldbetrickypolitically;

italsogoesbeyondwhatmostofficialsviewasaplausibleworst-casescenario.“Idon’tneedtorunastresstesttounderstandwhatadefaultofItalymeans,”saysone.Insteadthetestswillprobablyassumeslowergrowthasaresultofbunged-updebtmarketsandgetbankstorecognisethemarketpriceofsovereigninstrumentsintheirtradingbooks（butnotintheirlargerloanbooks.Aswellasthismiddle-of-the-road“worstcase”,thetestswillalsodefinebanks’capitalgenerously,usingTier-1capitalratherthanthemorestringentmeasureofcoreequity,whichtheAmericansusedandnewBaselrulesendorse.

MarcoAnnunziata,thechiefeconomistatUniCredit,saysa“stress-testlite”won’tbemuchuse.Twothingswouldhelp.ThefirstisareallyseriouskickofthetyresinSpain.IfinvestorsareconvincedthatallbaddebtsinSpain’sbankingsystemhavebeenrevealedandifSpain’sgovernmentshowsitcanraisethecashtorecapitaliseweaklenders,thenfearsaboutthecountry’ssolvencyshouldrecede.Thatinturnwouldmakea“nosovereigndefault”assumptioninothercountries’testsmoreplausible.SofarSpain’sbail-outfundhasraised€12billion（$15billionandfacesdrawdownsof€10billion.Providingthetotalbillstaysbelow,say,€50billion,itsgovernmentshouldeasilybeabletoraisethecash,eveninnastydebtmarkets.

Hideandseek

Second,thestresstestsshouldideallyprovideuniformdisclosureonindividualbanks’exposuretoweakercountries,soinvestorscanmaketheirownmindsup.SimonSamuelsofBarclaysCapitalsaysdisclosurehasbeenpatchytodate.Furthermore,whatfirmssayishardtoreconcilewiththeoverallestimates.Thishasledtoagameof“who’shidingdodgydebt?

”,somethingthatisfamiliartostudentsofthesubprimedebacle.Arecentstudyofconfidentialsubmissionsfromover30bigEuropeanbanksbyJean-Franç

oisTremblayofMoody’s,aratingsagency,concludedtheyhadexposuretoGreeceof€100billion.BasedondatafromtheBankforInternationalSettlementsthatleavesanother€90-oddbillionsittinginEurope’sbanks,presumablysmallerones.

IttookadecadebeforeJapan’ssupervisorslostpatienceandpublishedtheirestimatesofbanks’aggregatebaddebtsin2002and2003（promptingbankstoadmittomorelosses.AsinJapan,thebanksandregulatorshavelostthemarket’sfullconfidence.UnlikeJapan’sbanks,Europeanbanksrelyheavilyonwholesaleborrowingthatneedstoberefinancednow.Europewillhavetobitethebulletsoon.

Istherelifeafterdebt?

Richcountriesborrowedfromthefuture.Payingthebillwillbedifficult,andsowilllivinginathriftierworld

Theageofeasycreditanditsaftermath

DEBTisaspowerfuladrugasalcoholandnicotine.InboomtimesWesternconsumersusedittoenhancetheirlifestyles,companiesborrowedtoexpandtheirbusinessesandinvestorsemployeddebttoenhancetheirreturns.Foraslongastheboomlasted,MrMicawber’sfamousinjunctionappearedtobewrong:

whenannualexpenditureexceededincome,theresultwashappiness,notmisery.

Foralongtimedebtintherichworldhasgrownfasterthanincomes.Asourspecialreportthisweekspellsout,itisnotjustgovernmentdeficitsthathaveswelled.InAmericaprivate-sectordebtalonerosefromaround50%ofGDPin1950tonearly300%atitsrecentpeak.Theoriginsoftheboomgoevenfurtherback,reflectinghugechangesinsocialattitudes.Inthe19thcenturydefaultingborrowersweresenttoprison.ThegenerationthatlivedthroughtheGreatDepressionlearnedtoscrimpandsave.Butthewidertake-upofcreditcardsinthe1960screateda“buynow,paylater”society.Defaultbecamejustalifestylechoice.Therecklesslender,ratherthantheimprudentdebtor,waslikelytogettheblame.

Asconsumersleveragedup,sodidcompanies.TheaveragebondratingfellfromAin1981toBBB-today,justonenotchabovejunkstatus.Firmsthatheldcashontheirbalance-sheetswerecriticisedfortheirtimidity,whilebankruptcylaws,suchasAmerica’sChapter11,preventedcreditorsfromforeclosingoncompanies.Thatforgivingregimeencouragedentrepreneurs（inSiliconValleyabankruptcyislikeaduellingscarinaPrussianofficers’messbutalsoallowedtoomanyzombiecompaniestosurvive（lookattheairlines.Andnoindustrywasmoreaddictedtoleveragethanfinance.Banksranbalance-sheetswitheverlowerlevelsofequitycapital;

privateequityandhedgefunds,whichusedebtaggressively,churnedoutbillionaires.Theroadtoricheswassimple:

buyanassetwithborrowedmoney,thensitbackandwatchitspricerise.

Allthiswasencouragedbytheauthorities.Anytimeadebtcrisisthreatenedtheeconomy,centralbanksslashedinterestrates.Theprospectofsuchrescuesreducedtheriskoftakingonmoredebt.Bubbleswerecreated,firstinequities,theninhousing.Itwasamonetaryratchet,inwhicheachcycleendedwithmuchhigherdebtandmuchlowerinterestrates.Theend-gamewasreachedin2007-08wheninvestorsrealisedalotofthisdebtwouldnotberepaid.Asthecreditcrunchtightened,centralbankshadtocutshort-termratesto1%orbelow.

Andnowthereckoning

Rich-worldcountriesnowfacetwosetsofproblems.Themostpressingishowtopayofftheirdebts.Manypeoplewhohavecutbacktheircredit-cardspendingandfirmswhichhaveseentheircreditlinesslashedwouldbehorrifiedtoseehowlittletherichworld’soverallburdenhasfallen.Muchofthedebthasmerelymovedfromtheprivatetothepublicsectorasgovernmentshavecorrectlysteppedintosupportbanksandsavetheeconomyfromfallingintodepression.Andinthefuture,evenmoremoneywillhavetoberaised,becauseofgovernments’lavishpromisesofpensionsandhealthcarefortheretiringbaby-boomgeneration.

Allthisdebtwillhavetoberegularlyrefinancedandrolledover.Crisesofconfidencearelikely,giventhattherichworld’strendrateofgrowth（andthustheabilityofdebtorstoservicetheirloanslookssettoslow.Worse,muchprivatedebtissecuredagainstassets;

whilethevalueofthedebtisfixed,thevalueoftheassetscanfall.Thiscancauseaviciouscircleasdebtorsareforcedtosellassets,drivingpricesdown.Pilingupmoredebtdoesnotseemanoption.Thereislittle