Posted on 12/16/2014 12:15:39 PM PST by Former Proud Canadian
.
We recently noted the rise of counterparty risks in the financial system due to oil prices dropping (and leveraged derivative exposures) but as the Russia situation has deteriorated so dramatically this week, a renewed focus on bank exposures has sent stocks reeling (and credit risk soaring) among many European (and US) banks. As Bloomberg reports, Raiffeisen Bank International and Societe Generale, the European banks with most at stake in Russia, led European lenders lower. Raiffeisen fell as much as 10.3% to 11.40 euros in Vienna, the lowest level since it went public in 2005. Societe Generale dropped as much as 7.3% to 31.85 euros, hitting the lowest intraday level since August 2013. CDS markets for both also exploded with Raffeisen risk at 27 month highs. As one analyst noted, "There remains a huge amount of uncertainty at this juncture, but the key point is that there are no benign scenarios." While not on the same scale, US bank risk has also widened signicantly in recent weeks
(Excerpt) Read more at zerohedge.com ...
Russia pulled a Volker and jacked interest rates, so whoever was naked shorting the ruble was completely boned if they didn’t get out of their position as fast as possible.
Count the MINUTES between the rate hike announcement, the open of markets (in the US), and the shutting down of USD/RBL trades so they could cover.
Very, very connected players.
So, yes, Russia DID short squeeze and the US pulled another MF Global style save of their insider butts at everyone elses expense.
Sounds like all out financial war to me.
“Sounds like all out financial war to me.”
It is, as a part of much bigger, now full-blown TRADE WAR...
From that I see in my city both banks are extensively represented in Russia offering mortgages, car loans and other consumer credits.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.