President Nicolas Sarkozy, German Chancellor Angela Merkel and President of Eurogroup Jean-Claude Juncker, called Thursday a survey of the European Union on financial derivatives, and hoped the ban on "speculative transactions" the regarding.
In a letter dated March 10 released Thursday by the Elysee, the three leaders and the Greek Prime Minister George Papandreou proposed that the European Commission "due diligence as soon as possible an investigation into the role and impact of Speculation on CDS (credit default swaps, Ed) the obligations of European states. " CDSs are contracts to exchange the risks of default of a company or a state.Speculation on these CDS are singled out in the financial crisis currently Greece, heavily indebted.
Minimum holding period of CDS
"If this investigation was to expose abuses of market or that it exhibits evidence that speculation has an impact on interest rates, we will quickly review and action as appropriate, adopt laws and regulations necessary to end, "adds Angela Merkel, Nicolas Sarkozy, Jean-Claude Junker and George Papandreou cash till payday advance .
On the ground, the reality remains difficult for households. The number of properties seized by banks from borrowers who fell into default continues to climb.2.8 million homes have been taken last year. This year, the record will be beaten. The firm RealtyTrac expects 4.5 million seized in 2010. Optimists point to the stabilization of 9.5% "rate of late payment" mortgage loans in the fourth quarter. Still, the continued rise in defaults ending with seizures. The default rate is now higher than 5%. Equally alarming: the sharp deterioration of late payments by households belonging to a class yet considered less risky. The worst wave of default on subprime niche (highly indebted households) is certainly past.But the failure of the wealthier classes at record levels and is now approaching 10%.
This situation is equally problematic for banks whose balance sheets do not fully reflect the rising defaults on U.S. households trapped in unemployment and the collapse of their heritage. "Overall, we believe that U.S. banks have realized that a third of their losses on residential mortgages," said Robert McNatt agency Standard & Poor's.Financial institutions have beautiful long as possible seizures of homes, high unemployment and the proliferation of "strategic flaws" (see glossary below cons) continue to plumb their balance sheets.
GLOSSARY
• Hamp (or Affordable Home Modification Program)
Federal program encouraging banks to reduce rates and lengthen the duration of mortgage loans to households have at least 60 days late payment of their monthly payments.
The Treasury has set aside 75 billion dollars by 2012 to modify loans 3 to 4 million homes and avoid the seizure of their property and their expulsion. For a year, 830 000 borrowers have tried this program on an experimental basis.But 25% are again in arrears.
• Strategic Default
This is a practice that leads borrowers to stop paying their monthly mortgage lenders by personal choice or calculation, and not for reasons of loss of resources. The "strategic failure" is made safer in states like California or Arizona, where the bank can seize the house of the borrower and not its other assets.
• Under Water
For a home, it will return "under water" when the market value of their property has fallen below the amount of his debt to the bank. This applies to almost 10% of households in the United States who have subscribed to a mortgage.