Italian bank issues warnings to investors over euro currency

Posted on January 8, 2012 by The Extinction Protocol

January 8, 2012 – ROME -The Italian bank UniCredit warned its investors of the potential risk of a break-up of the euro as the single currency was battered on anxiety about the health of euro zone governments and their banks. Trading in the bank’s shares was halted five times on Thursday due to huge falls as shareholders digested the terms on which it was trying to raise €7.5 billion ($9.5 billion) to plug a hole in its regulatory capital. Italy’s market regulator, Consob, said it was looking at whether short-selling rules had been broken because of the 30 per cent fall in the shares in the 48 hours since the terms of the rights issue were announced. Short selling allows punters to make profits on falling share prices and has been prohibited in parts of Europe. Anxiety about the banking sector and fears about the ability of euro zone governments to repay their debts drove the euro to its lowest level against the US dollar since September 2010, an 11-year low against the yen and a near 16-month low against sterling. The prospectus issued by Unicredit – whose shares are at their lowest since its creation in 1998 – to entice its investors to support the €7.5 billion cash call, spelt out the possibility of a collapse of the euro zone. In a series of risk warnings that always accompany such share offerings, the bank said “concerns that the euro zone sovereign debt crisis could worsen may lead to the reintroduction of national currencies in one or more euro zone countries or, in particularly dire circumstances, the abandonment of the euro.” Sources believed this was the first time the warning, inserted by the army of lawyers working for the 27 banks underwriting the cash call, had been carried in such a document, but would not be the last. However, the bank insisted that it was not predicting a collapse of the euro zone. The warning went on to say that “any deterioration of the political and socioeconomic situation in Greece, as well as a decision by the group to participate in restructuring plans for Greek debt, could result in even bigger losses for the group than those recorded on September 30, 2011.” -SMH

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8 Responses to Italian bank issues warnings to investors over euro currency

Good Luck says:

January 8, 2012 at 11:21 pm

We aint seen nothing yet. Most likely Euro is going to implode during first Qtr of 2012!
If a catostophic event were to occur, none of these economies could withstand it.
Oh..say like multiple seismic events..effecting several continents. If one or more such
seismic events were to hit say, the west coast of the USA, they would crumble instantly.

1/6/12
Greece 50% hair cut coming? – Looks like a default to me!
And just exactly who is it that will take that 50% loss?
“Greek government and its creditors be reached “in the days ahead,” said top officials from the Institute of International Finance. Under the terms of the deal, which were outlined after a meeting of European Union leaders on Oct. 26-27, private sector investors would voluntarily accept a 50% reduction on the face value of Greek government bonds.”

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cossack55 says:

January 8, 2012 at 11:25 pm

The Euro is currently dropping against the dollar and at a 11 year low against the Yen. Yippee.
On the other hand, China, Japan, Russia, and Iran are now floating there own currencies amongst themselves and ignoring the dollar as the “reserve currency”.
All of which begs the question: Which world currency dies first? (note: first to the bottom wins).

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Philippino Bob says:

January 9, 2012 at 12:51 am

The impending break-up of Euro is very unlikely for the next 3 to 4 years. Yes, there will be plenty of rumors so that people would get used to the idea that it’s coming.
We told you so syndrome!
Eventually everything will go down as the geophysical events increase in intensity and frequency.
I am afraid In ten years time we may be living in near total chaos!

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Bone Idle says:

January 9, 2012 at 10:38 am

The Greek elections are timed to in April. By that time the depression in Greece will really start to take hold and the people will vote themselves a government to get them out of the Euro and or default.
If sanctions go ahead on Iran oil, Greece, which receives 35% plus of it’s oil supplies on alleged credit from Iran will be in desperate energy supply position. Traditional suppliers have ceased supplying Greece because of worry of a default.
Greece will start the dominoes toppling.
Germany will not pay to prop up other countries weak banks. Banks are the core of the economic system. Banks fail, society fails.

Philippino Bob says: January 9, 2012 at 12:51 am
The impending break-up of Euro is very unlikely for the next 3 to 4 years

The can can’t be kicked down the road that long.

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luisport says:

January 9, 2012 at 1:04 pm

zerohedge

Merkel: “If no progress on Greek aid package, next aid tranche can not be paid out”

há 14 minutos

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- The Extinction Protocol says:
  
  January 9, 2012 at 2:28 pm
  
  Here we go….
  
  Reply
luisport says:

January 9, 2012 at 2:10 pm

Something’s Changed About The Euro In a morning note, JPMorgan discussed the shift:

A weak euro doesn’t have to be negative for stocks any more – for most of the summer, domestic equities and the euro were positively correlated. Movements in the euro were taken as expressions of investor sentiment towards the region’s debt crisis (i.e. a higher euro signaled less fear of “tail” chaos and stocks benefited, and vice versa). However, over the last couple months the two have started to be less correlated (US stocks are sitting near recent highs while the euro is close to recent lows). Perceptions are starting to shift, w/a weaker euro now responding more to massive ECB accommodation/balance sheet expansion and less to sovereign fears. According to data out in late Dec, the ECB balance sheet soared to a record EU2.73T (and balance sheet is up >EU550B in just the last few months http://bloom.bg/u0jkro)…

Read more: http://www.businessinsider.com/somethings-changed-about-the-euro-2012-1#ixzz1iyD1Syld

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RainMan says:

January 9, 2012 at 7:53 pm

More like an ‘unbalanced sheet’….

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