Dollar trims gains, but doubts over ECB plan persist

Corporations and banks lose confidence that the recovery can succeed in the euro.
By: Suddeutsche.de
 
Aug. 6, 2012 - PRLog -- (Translated from German Newspapers)
While politicians in Europe to wrestle the right strategy for the rescue of the euro outside the euro-zone shrinks the confidence that the Europeans get their problems under control. In the perception of U.S. banks is superimposed on the euro crisis even worry about the ailing economy at home. The banks have already begun to reduce such risks and protect themselves for the worst case - the resignation of a country from the euro-zone, or even the breakup of the entire monetary union.


"We're preparing for a complete disintegration of the euro in 18 to 24 months," said a banker to the Financial Times . His risk is back down, the best thing you could do that.

Some companies appear to be beginning to feel uncomfortable with the idea that private capital is in ailing euro zone countries: The oil company Royal Dutch Shell has now announced that it withdraw its cash reserves from Europe. If it were common changes in the investment strategy, said a Shell spokeswoman.

The company would be forced to risk his worst back on from the debt crisis affected countries in the euro-zone, said Chief Financial Officer Simon Henry the London newspaper The Times . Instead, they wanted to invest $ 15 billion in U.S. Treasuries or U.S. banks.

And just the U.S. banks are now demanding from their customers in euro area countries to amend contracts to hedge against the failure of the single currency. Concern: When a country gets out of the euro and return to its old currency, want to get the banks to make payments in that currency - such as a devalued drachma (Greece) or less attractive pesetas (Spain).

Going on most of the contracts already in use English or American law, reports the Financial Times . The hope of the Institute: a franchised partner refuses from a country that has left the Euro-zone, continue to make payments in euro will be the appropriate courts on the side of the banks.

How bad is it really about Europe, but also disagreement between the banks. It is true that Citigroup, Goldman Sachs and Co. all its activities in the euro-zone back down. Some institutions appreciate the situation, however, a less dramatic than others. In the five worst-affected countries - Greece, Spain, Italy, Ireland and Portugal - Morgan Stanley is committed, for example, only with slightly more than five billion dollars.

In JP Morgan 's investment move in the order of more than $ 20 billion. Jamie Dimon, the head of the bank is confident that Europe is somehow "muddle through" the crisis will be.
End
Source:Suddeutsche.de
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