The US indexes fell sharply on Tuesday afternoon, accumulating losses for the third consecutive session, due to rising fears that the debt crisis in Europe will hit major banks in the region. The sale of the class shares admitted to shelter investment rather lower yield on state bonds to a record low. After the opening of the stock split with more than 300 points, around 21:00 GMT Dow Jones Industrial Average quoted around 11,064 points with a loss of 1.57%. All of the 30 components of the index in the red. Standard & Poor’s 500 index fell by 1.66 percent to 1154 points, the biggest drop among 10 industry groups of companies marked the index of the energy sector. Nasdaq Composite fell by 1.46 percent to 2444 points. The US indexes recovered some of their initial losses after the index for the service sector of the Institute for Supply Management unexpectedly rose to 53.3 points in August from 52.7 points in July. The banking sector in Europe was severely affected due to rising doubts about the readiness of Italy to adopt the necessary budget cuts.

Similar to how applicants for personal loans are evaluated, businesses and companies that are applying for a business loans are also assessed based on a number of factors or criteria. By assessing business loan applicants based on certain factors, banks are able to determine whether or not they are qualified for the bank loans that they are offering. Here are some of the factors which are used or considered by most banks today before they approve business loans.
Account Manager Turnover
Generally, banks prefer approving business bank loans for companies that do not change account managers often, as a frequent change of account managers is usually an indicator that a company does not have the best internal relations, which can in turn, mean that the company is not as efficient in carrying out their business operations.
Business Experience
This is another factor that most banks use in assessing the risk of a company or a business since the more experience a business has in the industry it is in, the more capable they are of dealing with any type of situation.
(more…)

The national Bank of New Zealand took an unexpected decision to lower interest rates in the country. Main reason for this is trying to promote economic activity after the devastating earthquake that hit the second largest city of Christchurch. The decision of the bank to lower interest rates by half a percentage point to 2.5 per cent. So the leaders of the institution is hoping to mitigate the economic consequences of severe earthquake. On 22nd February Christchurch was rocked by an earthquake with a force 6.3 on the Richter scale has caused enormous damage. Expectations of the authorities that it would take at least 15 billion New Zealand dollars (11 billion U.S. dollars) to correct the problems. The interest rate in New Zealand was at the level of 3% from April last year. Previously, he was at a record low 2.5 per cent because of the global financial crisis. According to many specialists this is dangerous action from the financial government of New Zealand, causing problems in the economy and banking system, but the results will be seen in a few weeks.

The global banking regulators have made a breakthrough in negotiations to tighten capital requirements for banks and the imposition of new standards liquidity and leverage, but relaxed some of the proposals, others delayed until early 2018, writes Financial Times. Basel Committee on Banking Supervision (Basel Committee on Banking Supervision) announced on Monday that all but one of the 27 member states of the organization sign the new document to limit the capital that banks may adopt a capital first-order ( tire-1) – the only assets that are disregarded in absorbing losses. Abstaining party as familiar with the negotiations is Germany, announced that it will decide whether to join the agreement later this year. The new rules aim to prevent the recurrence of financial crisis, but also may restrict lending. The real effect of the new regulations will depend largely on the subsequent decision of the Committee scheduled for autumn in which will determine the ratio between capital and tier one risk-weighted assets. The greater the ratio, the greater will be the effect. The Committee postponed a few of the more radical proposals, such as reporting “net ratio for stability of funding – first of its kind rule of liquidity, which will require banks to more closely link the timing estimates of assets and liabilities.
(more…)

In the event that stress testing of banks in Europe were made based on examination of the entire portfolio of government bonds to banks, 24 financial institutions it would not be able to withstand successfully. Such is the opinion of analysts of U.S. bank Citigroup. Such a scenario would have shown that the financial institutions need to raise capital amounting to 15 billion euros to be stable at any shock to the system, reported Financial Times. The problem with stress testing, which was attended by 91 banks, is that called were tested. commercial paper, rather than purchased in order to hold to maturity government bonds. The difference between them is that first used for commerce in the short and medium term, while others show real risk that government securities carry. Analysts say the U.S. Spanish bank financial institutions had the greatest benefit from such testing in this way. The reason is that they have significant positions in the Portuguese and Spanish government bonds, many of which fall under the heading hold to maturity, the newspaper added.
(more…)

With one billion dollars can do a lot: for example, to escape death 800,000 infants. But this money can be organized and meeting a giant, as was the G-20 in Canada. Against the background of financial profligacy, result from the Forum in Toronto is actually quite modest. But things may be considered in another way: the background of spending now to save banks and entire countries, one billion is less.
Banks as insatiable octopus
All agree that the world needs a new structure of financial markets. The question is how to do this. Thought leadership is that banks should return to its original role as servants of the economy – rather than as insatiable octopus. They should also be able to fail without entailing by itself the entire financial system. In Toronto Barack Obama proudly presented the plan for a new financial architecture, even this week is expected to be adopted by Congress. Europeans were impressed and now will have to try to draw something. On the eve of the meeting is very murmured: America against Germany – cyclical policy programs for savings. At the end wins the mind in the form of an ambitious formula – growth through smart saving. After this crisis are all basking in an unfamiliar terrain, so there are no winners and the losers in current discourse. This is a surprise from Toronto.
(more…)

The strong red wave that swept the securities markets around the world today is not passed and indexes in the U.S.. Today’s session began with sharp decreases for all three major stock indicators on Wall Street despite the best evidence of the sharp increase in consumer confidence in May. The index that tracks the attitudes of households in the U.S. state of economy and labor market jumped from 57.5 points in April to 63.3 points in May, which was more than expected and its highest level in more than two years. Before the start of the session showed that house prices in major U.S. cities fell in the first quarter, which is a sign of instability in the property market in the country. It showed the index of S & P / Case-Shiller 20-largest city, which reported a decline of 3.2 percent in the first quarter. Compared to last year, however, family houses in the U.S. have increased by 2 per cent. The index of the 30 largest U.S. companies and traded Dow Jones Industrial Average lost 2.1 percent to 9 858.14 points an hour after the start of the session. It closed trading on Monday at its lowest level in three months.
(more…)

The end of the working week has brought the closing of eight more American banks. Thus the number of bank failures in the country since the beginning of the year was rounded to 50. Six of the closed banks are quite small, but two are medium sized for the U.S. market. Three financial institutions are located in Florida, two in California and one bank was closed in Massachusetts, Michigan and Washington. Closed banks in Florida Riverside National Bank, which had assets of 3.4 billion dollars, First Federal Bank of North Florida with assets of 393.3 million dollars and AmericanFirst Bank, which had assets of 90.5 million dollars. By Federal deposit insurance corporation in (FDIC) announced that the division of the Canadian Bank TD Bank – TD Bank Financial Group, has agreed to accept all the deposits and almost all the assets of the three financial institutions. The cost of the insurance fund of the FDIC from the three banks is estimated at about 505 million dollars. Were still closed Innovative Bank, which had assets of 269 million dollars and Tamalpais Bank with assets of 629 million dollars. Both financial institutions are based in California, but their failure will cost the FDIC a total of about 120 million dollars.
(more…)

The U.S. president Barack Obama has sent Congress a draft law which, if adopted, would prohibit the marketing risk of banks and impose restrictions on their size. Under the project, banks will be allowed to trade only for their own benefit and they can not “possess” more than 10 percent of the total liabilities of the banking system through acquisition. The measures will rank the regulators to block mergers that would increase the market share of a bank above a certain limit, unless it becomes bankrupt bank with the permission of the regulatory authorities. The purpose of the bill submitted by President Obama in late January, is to prevent another crisis like the present by reducing the propensity of banks to take risks. The proposed limit of liability is held close to the existing limit on bank deposits. Commercial banks in the United States held 10.4 trillion. dollar liabilities at February 17, according to the Federal Reserve. From JPMorgan Chase held 1.5 trillion. dollars of the total liabilities of commercial banks at 31 December, Bank of America – 1,3 trillion. dollars, and from Citigroup – 1 trillion. dollars.
(more…)

The participants at the meeting of finance ministers of the Big septenary in Canada agreed to consider how to punish those responsible for future crises. It is proposed that measures to rescue financial institutions in times of crisis can not be paid from government budgets or from taxpayers, and by the banks themselves. This will introduce a special tax credit institutions, the proceeds of which will go towards the creation of special anti-crisis fund. “Fat cats” on Wall Street is hardly like the idea, said Bloomberg. “We discussed whether it would be pre-emptive right in the long term to introduce a special tax on the banking industry to compensate for losses to be incurred in any crisis,” said Finance Minister Alistair Darling of Britain. He explained that all in the beginning, but importantly, it agreed to work over this idea, a willingness of all parties to seek a global solution. To be fenced in the bud any opposition from bankers, finance ministers of most industrialized countries started a campaign to find a consensus on the imposition of a special “anti-crisis tax” on banks. The main topic of the meeting of the G-7 and chiefs of central banks of those countries were once again the global economic problems. Greater clarity on the concept introduced by Minister of Finance of Canada Jim Flyers, who in an interview on CBS, said: “All we want in the future banks, not taxpayers pay for emergency measures enacted to rescue the credit institutions. And it should be legalized in this year when the reform should begin in the banking industry.”
(more…)