Greek Prime Minister Calls For Referendum On New EU Aid Deal – WSJ.com

ATHENS (Dow Jones)–Greek Prime Minister George Papandreou Monday called for a popular referendum on a newly minted aid-and-debt deal for Greece, while also demanding a fresh vote of confidence in his embattled Socialist government.

“For the new [aid] deal we have to go to a referendum,” Papandreou told Socialist party deputies.

His remarks come just days after European leaders in Brussels announced a series of decisions aimed at stemming the spread of the euro zone’s widening debt crisis. The plans include boosting the firepower of Europe’s temporary bailout fund, and recapitalizing Europe’s banks.

A deal under which Greece’s private-sector creditors accept a nominal 50% “haircut” on the country’s public debt is central to the plan. In exchange, Greece will receive some EUR100 billion ($139.3 billion) in fresh aid to help cover its financing needs over the next few years.

Elected to a four-year term in October 2009, the ruling Socialists or Pasok party has seen its parliamentary majority whittled down as lawmakers have bolted from the party in protest over two years of austerity measures.

via Greek Prime Minister Calls For Referendum On New EU Aid Deal – WSJ.com.

Italian Bonds Slide on Contagion Concern; German Bunds Advance – Bloomberg

Bloomberg:

Bailout Fund

After two crisis summits in four days, European Union leaders agreed on Oct. 27 to increase the bailout fund to 1 trillion euros, recapitalize banks and convince lenders to write down their holdings of Greek debt by 50 percent.

That didn’t halt a slide in Italian debt, with 10-year yields rising 15 basis points on Oct. 28 and another eight basis points today, to 6.10 percent. Spain’s 10-year rate increased three basis points to 5.54 percent, and similar-maturity Belgian yields jumped eight points to 4.38 percent.

The December Italian bond futures contract fell 0.6 percent to 97.04, widening the difference over its German equivalent to 38.22, the most in a month.

MF Global, which said on Oct. 25 it owned $6.3 billion of Italian, Spanish, Belgian, Portuguese and Irish bonds, listed total debt of $39.7 billion and assets of $41 billion in Chapter 11 papers filed today in U.S. Bankruptcy Court in Manhattan. MF Global declined 67 percent last week and its bonds started trading at distressed levels amid its disclosures of bets on European sovereign-debt.

‘Market Trauma’

“It’s an example of the market trauma,” said Charles Diebel, head of market strategy at Lloyds Bank Corporate Markets in London. “It’s broadly speaking bullish” for bunds, he said.

via Italian Bonds Slide on Contagion Concern; German Bunds Advance – Bloomberg.

BUSTED: Employees At Law Firm Mocked Foreclosed On Homeowners At Halloween Party

This is going to be very awkward for the lawfirm Steven J. Baum.

NYT columnist Joe Nocera has just posted pictures from last year’s Halloween party, where employees mocked foreclosed-on homeowners by dressing up as homeless foreclosees among other things.

What’s doubly bad about mocking the unfortunate is that Steven J. Baum is a lawfirm that handles mortgage issues for all the major banks.

As Nocera notes, these images are from the 2010 party, but somehow that probably won’t get the firm off the hook.

via BUSTED: Employees At Law Firm Mocked Foreclosed On Homeowners At Halloween Party.

US Senators to Federal Bank Regulators: Must Ensure Risky Behavior by Banks Does Not Threaten Taxpayers

WASHINGTON, Oct. 27 — The office of Sen. Bob Casey, D-Pa., has issued the following news release:

Senator Bob Casey (D-PA), Chairman of the Joint Economic Committee, sent letters today to federal banking regulators expressing concern that Bank of America has moved trillions of dollars in derivatives from its subsidiary Merrill Lynch into a subsidiary insured by the Federal Deposit Insurance Corp (FDIC).

“We have seen what happens when we allow banks to play roulette with taxpayer money,” said Senator Casey. “The Administration has an obligation to ensure that taxpayers are not on the hook for risky bets by big banks.”

Three years after taxpayers rescued some of the biggest U.S. banks, lawmakers continue to question how to protect taxpayers from risks generated by investment-banking operations. The letter outlined concerns over a reported increase in so-called 23A exemptions, referring to the section of the Federal Reserve Act that separates insured banking from investment activities.

Casey was joined by U.S. Sens. Sherrod Brown (D-OH), Carl Levin (D-MI), Jeff Merkley (D-OR), Mark Begich (D-AK), Richard Blumenthal (D-CT), Tom Harkin (D-IA), Bill Nelson (D-FL), Sheldon Whitehouse (D-RI), and Maria Cantwell (D-WA) in sending the letter to banking regulators.

via Insurance News – Casey to Federal Bank Regulators: Must Ensure Risky Behavior by Banks Does Not Threaten Taxpayers.

Illinois bank closed; 85th to fail in U.S. in 2011 – MarketWatch

Regulators on Friday closed a bank in Illinois, bringing the nationwide tally of bank failures up to 85 for the year.

Des Plaines, Ill.-based All American Bank, was closed by the state’s Department of Financial and Professional Regulation. International Bank of Chicago agreed to take over the failed bank as part of a purchase-and-assumption deal with the Federal Deposit Insurance Corp. It was Illinois’ ninth bank failure this year.

All American had about $37.8 million in total assets and $33.4 million in total deposits at the end of June. International Bank of Chicago agreed to acquire all of the failed bank’s deposits and buy essentially all of its assets.

The FDIC estimates that the cost of the bank’s failure to the Deposit Insurance Fund will reach $6.5 million.

Depositors of the failed bank will automatically become depositors of the new bank and deposits will continue to be insured by the FDIC. The FDIC insures deposits for up to $250,000 per depositor.

via Illinois bank closed; 85th to fail in U.S. in 2011 – MarketWatch.