EU Bank Bailout Format Agreed
Following difficult discussions over the weekend which saw all the EU finance leaders struggling to agree how to format future bank bailouts an agreement has now been struck. There were talks about using a Cyprus style levy on anyone who held a deposit with a troubled bank but this agreement has meant this is now less likely to happen. Instead it has been agreed that the banks creditors will take the first loss, followed by savers who hold deposits of over €100,000 with the governments being the final port of call to help keep the banks solvent. Considering EU taxpayers have had to foot the bill for previous bank bailouts this comes as good news and sends a positive message to Europe, especially as it shows there is some unity amongst the leaders. The aim of this agreement is to ensure that bank debts are not laid on the taxpayers and that the financial community becomes more responsible for its own problems.
While this is positive news and looks, in theory, like a good agreement it does seem a shame that it was not in place before the credit crisis took place, however the EU finance ministers have learnt from the previous problems and have looked to prevent the issues causing contagion across the single currency economy.
US Economic Growth Revised Down
It was confirmed last night that US Gross Domestic Product (GDP) was lower then previously estimated coming in at 1.8% rather than the predicted 2.4%. The downward revision comes as a result of falling export and a slowdown in consumer spending. This figure was surprising but after last weeks significant strengthening of the Dollar it has not had a big impact on the exchange rates. Last week we saw GBP USD rates fall from around the 1.5750 mark down to below 1.53 meaning there are currently some excellent opportunities for those clients looking to sell US dollars. The negative impact of these figures will not just effect the Dollar though, as we often see negative economic data for America having a knock on effect for the rest of the global economy. So, if you need to transfer money abroad and you are looking for the best exchange rates make sure you speak with one of our experienced currency brokers who will be more than happy to discuss your currency requirements and the different contract options available to you.
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