European Central Bank News

Supply constraints thwarting global economic growth could still get worse, keeping inflation elevated longer, even if the current spike in prices is still likely to remain temporary, the world’s top central bankers warned on Wednesday.The disruptions to the global economy during the pandemic have upset supply chains across continents, leaving the world short of a plethora of goods and services from car parts and microchips to container vessels that transport goods across the seas.“It’s ...

A growing number of hedge funds are moving into shipping debt, an asset class few have invested in before, looking to buy up loans and bonds as banks cut their exposure to the troubled sector.World economy worries and cost pressures are dampening prospects for a proper recovery in many segments of the shipping sector, which has struggled with tough markets for a decade.Meanwhile European banks, particularly German lenders, are trying to offload distressed and performing loans…

Asian shares fell to a 2-1/2 week low on Monday after U.S. President Donald Trump cranked up trade tensions by going ahead with tariffs on Chinese imports, prompting Beijing to immediately respond in kind.Fears of a global trade war added to pressure on oil prices, which extended Friday's big fall, while the dollar retreated from near 3-week highs against the safe haven yen.Spreadbetters suggested a subdued start for European shares, with FTSE futures off about 0.1 percent. U.S.

Germany's HSH Nordbank, once the world's biggest ship financier, aims to buy shipping loans from other banks and make new investments in the industry as it emerges from years of turmoil, a top bank official said.The bank's regional government owners are selling the lender to buyout groups Cerberus Capital Management and J.C. Flowers, with investors GoldenTree, Centaurus Capital and Austrian bank BAWAG also taking stakes."HSH, at the end of this process of privatization, will for the first time since 2008 be restored.

The recent months’ uptick in global indicators, which implies a strengthening in the global economy, is not sufficient for the patient to be discharged yet. The state of the global economy is still uncertain, despite stronger growth dynamics in advanced economies, and not least in China. When the IMF updated its outlook for advanced economies for 2017 and 2018 in January, it was the first time since 2007 that an IMF January update lifted expectations for the present and coming years.

The world's no. 2 container line Mediterranean Shipping Company (MSC) is in talks to acquire a stake in smaller Italian counterpart Messina, the Swiss-headquartered group said, in another sign of consolidation in the sector. Container lines are battling their worst ever downturn due to a glut of ships and weaker demand - prompting rivals to form vessel-sharing arrangements or pursue other measures including mergers and acquisitions. Privately owned MSC said it had held a meeting on Friday in Genoa with Messina and senior management from lender Banca Carige. "The aim of the meeting was the possibility of an entry by MSC Group into the shareholding of the Genoa-based group," MSC said in an emailed statement sent on Tuesday.

The global shipping industry will hit a credit crunch if proposed new bank capital rules are implemented in a sector already weighed down by toxic debt, bankers involved say. The Basel Committee of banking supervisors from nearly 30 countries met in Chile last month in an effort to complete the new rules for lenders in the world's major financial centres. It is now trying to pin down the details. While the rules do not target shipping specifically, some of the biggest rises in…

German banks are struggling to recoup tens of billions of dollars of loans as a global shipping industry slump hits them hard. The lenders - among the biggest backers of shipowners over the past 20 years - are behind up to a quarter of the world's $400 billion of outstanding shipping loans, three shipping financiers told Reuters. This would make them collectively more exposed than banks from any other single country in terms of outstanding debt to the sector. These institutions…

German state-owned lender NordLB and KKR Credit said they had reached an agreement by which KKR Credit will acquire a $1.5 billion portfolio of shipping loans from NordLB jointly with an unspecified sovereign wealth fund. The portfolio of performing and non-performing loans will include up to 100 ships and will form the seed mandate for a portfolio management company that the buyers plan to set up. NordLB is one of several German banks seeking to cut its ship loan exposure as the container and dry bulk shipping industries struggle with their worst downturn due to a glut of ships, a faltering global economy and weaker consumer demand.

Global capital markets reeled on Friday after Britain voted to leave the European Union, with $2 trillion in value wiped from equity bourses worldwide, while money poured into safe-haven gold and government bonds. Sterling suffered a record plunge. The blow to investor confidence and the uncertainty the vote has sparked could keep the Federal Reserve from raising interest rates as planned this year, and even spark a new round of emergency policy easing from major central banks. The traditional safe-harbor assets of top-rated government debt, the Japanese yen and gold all jumped. Spot gold rose more than 5 percent and the yield on the benchmark 10-year U.S. Treasury note fell to lows last seen in 2012 at 1.5445 percent. Stocks tumbled in Europe.

The Royal Bank of Scotland has received bids for its Greek ship finance business, banking and financial sources familiar with the matter said, following a leap in bad shipping debts at the lender over the past few months. They told Reuters that the operation was worth about $3 billion although sources in the shipping business said that problems with lending to the industry, much of which is in a deep downturn, would affect the value of what could be recouped via a sale. Credit Suisse and China Merchants were among the suitors bidding, the sources said. RBS and Credit Suisse declined to comment, while China Merchants did not immediately respond to an emailed request for comment.

European Central Bank (ECB) kicked off a review into the risks of banks’ shipping exposure, Reuters reported. ECB is conducting an in-depth review of banks’ exposure in shipping amid rising provisions for bad debt in an industry still mired in crisis. The ECB’s banking supervisor sent an email at the end of last week asking a raft of European banks for details of their shipping loans and the status of their loan loss provisions as an “initial step” in a broader review of lending in the sector, one of the sources quoted the email as saying. “It is a very extensive request,” the source told Reuters. The review follows a clash earlier this year between the bank supervisor and HSH Nordbank AG…

The European Central Bank has urged German state-owned lender Bremer Landesbank to shore up its capital resources against non-performing loans in shipping, three sources familiar with the matter said. Bremer (BLB) needs another 700 million euros ($800 million) in equity, weekly magazine Focus reported earlier on Saturday, citing talks between the city-state's finance chief and parliamentary leaders. "There are close discussions with the ECB," one of the sources told Reuters. Strengthening BLB's capital is a "matter of intense talks," a second source said. Germany was one of the world's main centres of global ship finance before the 2008 financial crisis, and the five German banks with the closest links to the shipping industry still have around 80 billion euros on loan to the sector.

Germany's shipping lenders are preparing for sustained pain as weakening trade and an over-supply of ships show no signs of easing, industry officials said. Europe's biggest economy was one of the world's main centres of global ship finance before the 2008 credit crisis and the five most involved banks still have around 80 billion euros ($88 billion) of loans outstanding to the sector, a difficult exposure to manage given tighter scrutiny from bank regulators. "The structural imbalance from the over-supply of transport capacity and low demand will continue and we don't expect any encouraging upswing as a result," shipping bank DVB Chief Executive Ralf Bedranowsky said on Thursday.

Global economy: menacing clouds in the sky cast a shadow on global economic developments 2015 never really took off, even though the global economic activity looked stronger earlier in the year. The negative indicators seen at the end of 2014 were not overcome, and we saw a significantly lower level of growth for global GDP in 2015 than in the previous five years. This was primarily due to the struggling emerging markets and developing economies, led by changes in China’s economic focus. As BIMCO’s hope for a bounce-back in 2016 wanes, shipping should brace itself for yet another challenging year. Despite this, the International Monetary Fund has forecast higher GDP growth rates for 2016 across the board.

European shares fell on Tuesday, the last full trading day of the year, led lower by energy companies as Brent oil fell to a 5-1/2-year low on persistent concerns about a global supply glut. The STOXX Europe 600 oil & gas index was down 1.9 percent at 1219 GMT, taking its loss for the year to 15 percent. The price of Brent oil is down by about half since June due to a big oversupply and tepid demand, hitting energy companies hard. Explorers Seadrill and Tullow Oil were down around 3 percent. The UK FTSE 100 index fell 0.9 percent, underperforming its European peers, with London-listed energy majors BP and Shell down some 2 percent. UK retailer Next bucked the trend…

The International Monetary Fund will resume bailout talks with Greece once a new government is in place after next month's snap general election, IMF spokesman Gerry Rice said in a statement on Monday, noting that Athens faces no immediate funding needs. "Discussions with the Greek authorities on the completion of the sixth review of the program that is being supported by an Extended Arrangement will resume once a new government is in place, in consultation with the European Commission and the European Central Bank," the emailed statement said. Prime Minister Antonis Samaras announced plans for a general election on Jan. 25 after lawmakers rejected his candidate for president in a vote that will automatically lead to the dissolution of parliament.

Brent crude fell for a third day on Wednesday, slipping further below $97 a barrel as inflated supplies and weak economic data from Europe outweighed rising geopolitical tensions in the Middle East. * U.S. The European economic data and a rise in oil exports from Iraq and Nigeria overshadowed a boost from China with Tuesday's release of a better-than-expected flash Purchasing Managers' Index (PMI) for September. U.S. air strikes on militants in Syria also failed to lift prices. Brent for November delivery slipped 1 cent to $96.84 a barrel by 0704 GMT, although U.S. crude rose 29 cents to $91.85 a barrel. "Oil prices did not really gather the support coming from China's manufacturing data from yesterday as softer European manufacturing data followed…

Crude oil futures fell on Friday and ended the week more than 2 percent lower as disappointing jobs data from the United States cast doubt about the strength of economic growth in the world's biggest oil-consuming economy. U.S. jobs figures showed nonfarm payrolls increased by just 142,000 in August, well below forecasts of 225,000 and the smallest rise eight months. "U.S. economic growth was supposed to counter the slowing in China and Europe and the payrolls report threw a little cold water on that idea," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut. Brent crude for October delivery fell $1.01 to settle at $100.82 a barrel, having dropped to $100.35 intraday. The last time Brent was priced under $100 was in June 2013. U.S.

ECB in discussion with German supervisors; question over treatment of ship loans in health check. Compromise emerging which may involve 'haircut' on loan valuations. The European Central Bank is taking a hard line on the controversial issue of how shipping loans should be valued in a wide-ranging review into the health of the euro zone's banks, several sources familiar with the matter said. The ECB is making sure the euro zone's most important banks have properly valued their assets and have enough capital to withstand future crises so it can begin with a clean sheet when it takes over as their supervisor from Nov 4. In the past, critics said national supervisors overlooked or even tolerated warning signs of potential shortfalls at banks for fear of causing upsets.

The International Monetary Fund (IMF) has downgraded its global growth projection from 3.7% in April to 3.4% in July. The adjustment is primarily due to the large negative result in the U.S. in the first quarter of the year. The IMF stressed that this is now behind us – and it therefore sticks to its 2015 projection with an unchanged growth level of 4.0%. Moreover, the outlook for the various emerging markets including, amongst others, Russia, ASEAN-5, Brazil, Mexico and South Africa, is now less optimistic compared to the assessment made three months ago.

The global economic recovery continues along the rather bumpy lines described in the most recent report on macro economics from BIMCO. Chief Shipping Analyst at BIMCO, Peter Sand, said, "Economic data coming in today dampens optimism for the Euro zone a bit. A lower of level of GDP growth and inflation is affecting shipping demand slightly negatively. Bloomberg reported, The European Commission trimmed its economic growth forecast for the Euro area and predicted low inflation to remain a threat to expansion for at least the next two years.

The last 12 months has been one for the books ... or the trash. There was no shortage of government inducements to turn the lackluster tide in 2012—stimulus spending in China and Japan, quantitative easing by the U.S. Federal Reserve, and multiple actions by the European Central Bank to strengthen the Eurozone. But as the year evolved, weak macroeconomic fundamentals decisively trumped monetary policy initiatives and continued their choke on global commerce, hence the maritime sector.