Financial News

Moody’s Downgrades Spanish Banks

Distress continues in Europe. On Thursday Moody’s downgraded sixteen Spanish banks including BBVA and Santander, two of the biggest financial institutions in the country. The ratings agency mentioned the reduced ability of Spanish government to support them in a crisis. According to Moody’s “The Spanish economy has fallen back into recession in first-quarter 2012, and Moody’s does not expect conditions to improve during 2012”. The credit downgrade is a worrisome sign for investors and may cause a rise in the borrowing costs.
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The Smart Campaign Launches MF Library

The Smart Campaign is a global initiative to unite microfinance leaders around a common goal: to keep clients as the driving force of the industry. Last week it announced the launch of a client education resource library. A group within its task force has compiled a comprehensive list of client education materials that are in use in contemporary MF Industry. The resources come from a diverse group of regions and institutions and include a wide range of mediums (for example brochures, post cards, capsules, videos and cartoons). The library is still in development and will continue to expand in the next months.
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“De facto” Devaluation in Argentine

Aldo Pignanelli, a former Argentine Central Bank president, warned that if economy follows on the current course a “de facto devaluation” is round the corner. “The situation is unsustainable in the long term: 4.50 Pesos and 5.50 Pesos for the official and the parallel dollar will end having a great impact on the level of prices”, he said. He blames the government of Cristina Fernández de Kirchner for the current situation (Argentina is the country with the highest inflation in the region) and calculates that by the end of the year the US Dollar will be trading at 5 pesos in the official market and 6 pesos in the parallel market.
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Facebook: The Third Largest IPO in History

On May 17th Facebook, the biggest social network of the Internet, priced its Initial Public Offer (IPO) at US $38 a share. Financial experts calculate that at that price the company will raise US $16 billion, the largest technology IPO in history and the third largest IPO ever (Visa raised US $19.7 billion in 2008, and General Motors raised US $18.1 in 2010). Facebook is expecting the Securities and Exchange Commission to declare its offer effective before it can sell the shares to potential buyers. The clients may include large institutional investors, mutual funds and hedge funds.
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A Possible Greek Exit From the Euro

The European Central Bank and the European Commission are making contingency plans for a possible Greek exit from the euro, according to a note published by BBC News. Karel De Gucht, trade commissioner, considers that the plans could minimize any “domino effect” in Europe. “Today, whether within the European Central Bank or the European Commission, services are studying emergency scenarios where Greece cannot manage” he asserted. On Thursday Fitch Ratings Agency downgraded Greece’s credit rating mentioning the heightened risk that the country may have to leave the eurozone.
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