Troika to supervise €100bn Spanish bank loan

Here's an optimistic headline on the Financial Times that could easily be off by a factor of 10 or more: Spain’s banks need €10bn more provisions. Spanish banks will need to put aside extra provisions of up to €10bn to cover loans that borrowers will struggle to repay, according to an internal estimate by the Bank of Spain.

The soap opera in Greece continues with Germany and France tugging on opposite sides of the rope, and support for Golden Dawn, an alleged neo-Nazi party rising in the wake. French president François Hollande is on the sidelines, not wanting another battle with German chancellor Angela Merkel who has her own set of problems.

The hit parade of demands on Greece keeps right on marching. The Troika has 38 new demands in addition to 10 pages of prior demands that have not been met. The ten-page list of prior demands need to be met by the end of the month. Fortunately this is leap year so Greece gets an extra day. The Financial Times reports Athens told to change spending and taxes.

The driver of today's episode of "make the futures levitate" is not so much a rise in the EURUSD as Europe reopens - a very unhappy Europe where Italy's Monte Paschi was already halted down once on news from this weekend it was the first peripheral bank to suffer a depositor "run" - but curiously the USDJPY which after tumbling to under 93 and pushing the Nikkei 225 down by another 1% to just over 12,000 has been ramping gradually all morning to end well above the start of Japanese trading and was back to 93.25 at last check.

Reuters reports Greek PM, Finance Minister Will Miss Summit Due to Illness. Illness means both Greece's new prime minister and finance minister will miss an anxiously awaited summit of European leaders later this week and delayed a visit by the country's international lenders.

BRUSSELS/BERLIN – Germany signaled on Wednesday it was ready to back plans for the European Central Bank to be made the chief supervisor of banks, raising the prospect of a breakthrough on the European Union’s most ambitious financial reform. Finance Minister Wolfgang Schaeuble told the German cabinet he was “optimistic” about a deal ahead of a meeting of EU finance ministers in Brussels on Wednesday, a German official said, speaking on condition of anonymity.

BRUSSELS – Germany and France clashed publicly on Tuesday over plans to put the European Central Bank in charge of supervising banks, deepening a dispute over the scope of ECB powers that threatens to derail one of Europe’s boldest reforms. With time running out to meet a pledge to complete the legal framework for an EU-wide banking union by the end of the year, Germany’s Wolfgang Schaeuble told a meeting of EU finance ministers he could not support a plan that would give the ECB the final say on supervision.

In the wake of a huge market reaction on Friday, it's interesting to see how the headlines read other places, especially Spain. Here is one such viewpoint by El Confidencial: Government 'sacrificed' Bank of Spain in Exchange for Financial Sector Bailout