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By Matthias Rieker

TAKING THE PULSE: America’s businesses continued to help banks grow in the fourth quarter, but commercial loans are unlikely to even the impact from turbulent capital markets and sluggish consumer borrowing.

Those issues will particularly impact J.P. Morgan Chase & Co.

/quotes/zigman/272085/quotes/nls/jpm JPM
-2.52%

— Chief Executive Jamie Dimon already said he expects another weak quarter in capital markets–Bank of America Corp.

/quotes/zigman/190927/quotes/nls/bac BAC
-2.65%

and Citigroup Inc.

/quotes/zigman/5065548/quotes/nls/c C
-2.72%

, which have sizable capital markets operations.

Investment-banking advisory revenue declined 40% from a strong quarter a year earlier, but trading revenue rose 15%, said JMP Securities analyst David Trone. However, compared to the sluggish third quarter, Trone expects revenue from trading to fall, while advisory and underwriting will be flat.

Consumer loans continue to shrink while net interest margins, essentially the profit margins in the lending business, are under pressure from low interest rates. Mortgage originations are expected to rise, but Dimon told investors last month that “mortgage banking revenue will be a little bit lower than people expect.”

However, demand for new business loans, particularly in the middle market, continued to be strong.

The Federal Reserve reported commercial and industrial loans at U.S. banks rose 11.8% in 2011 to almost $1.1 trillion, as of Dec. 28, which includes a 4.2% jump in the fourth quarter.

The Commerce Department said business inventories rose in November, the 25th gain in the last 26 months. The Institute for Supply Management said the manufacturing sector expanded in December for the 29th-consecutive month.

The economy “felt better to us than what you read about sometimes,” Wells Fargo Chief Financial Officer Timothy Sloan said in a recent interview.

J.P. Morgan -- Reports Jan. 13

Earnings estimate: Analysts expect earnings of 92 cents per share, according to Thomson Reuters, and revenue of $23.4 billion. A year earlier, the bank reported earnings of $1.12 a share and revenue of $26.7 billion.

Key issues: Investment banking is likely to be a blow to overall results as the business is the biggest money maker for the bank. Stifel Nicolaus analyst Christopher Mutascio said one big offset will come from a possible reduction to the reserve for losses from bad loans thanks to improving delinquencies. Dimon said last month that it would be "very, very hard" not to reduce reserves soon.

Citigroup -- Reports Jan. 17

Earnings estimate: Analyst expect earnings of 51 cents a share, and revenue of $18.6 billion. A year earlier, Citi earned 40 cents a share and reported revenue of $18.4 billion.

Key issues: Chief Executive Vikram Pandit already disclosed a slew of one-time charges tied to issues ranging from taxes in Japan to the value of Citi's own bonds, bringing earnings estimates down sharply even from Friday. Slow economic growth in the U.S. will be offset by faster growth in emerging markets, where Citi refocused its expansion under Pandit. That strategy will hold for now, though Wells Fargo Securities analyst Matthew Burnell has "broad concerns about a slowing of international economic growth" in 2013.

Wells Fargo -- Reports Jan. 17

Earnings estimates: Analysts expect earnings of 72 cents a share and revenue of $20 billion, compared to per-share earnings of 61 cents and revenue of $21.5 billion a year earlier.

Key issues: With a smaller capital markets business, the focus continue to be on Wells Fargo's loan growth. It hasn't disappointed in recent quarters. In addition, revenue benefits from Wells' strategy to sell more products to customers it got with the 2008 acquisition of Wachovia Corp. But the net interest margin will continue to decline, CFO Sloan said. If "margin compression is greater than we anticipate... then we would have to rethink our investment thesis," Stifel's Mutascio wrote.

Bank of America -- Reports Jan. 19

Earnings estimates: Analyst expect earnings of 20 cents a share and revenue of $23.8 billion, compared to per-share earnings of 4 cents and revenue of $22.4 billion a year earlier.

Key issues: Charges will continue to make Bank of America's quarter messy. This quarter, the bank sold another big chunk of China Construction Bank Corp.

/quotes/zigman/529424 CICHY
-0.14%

, closed on its sale of some Canadian credit-card operations and swapped preferred stock for new shares and debt. Those actions boosted capital, a focal point these days. But mortgage issues will remain the biggest question. Recently, demands from Fannie Mae

/quotes/zigman/226360 FNMA
0.00%

and Freddie Mac

/quotes/zigman/226335 FMCC
+1.82%

to repurchase loans have picked up, spooking investors.

/quotes/zigman/272085/quotes/nls/jpm

Add JPM to portfolio

JPM

JPMorgan Chase & Co.

$
35.92

-0.93
-2.52%

Volume: 61.58M
Jan. 13, 2012 4:01p

/quotes/zigman/190927/quotes/nls/bac

Add BAC to portfolio

BAC

Bank of America Corp.

$
6.61

-0.18
-2.65%

Volume: 337.54M
Jan. 13, 2012 4:00p

/quotes/zigman/5065548/quotes/nls/c

Add C to portfolio

C

Citigroup Inc.

$
30.74

-0.86
-2.72%

Volume: 65.69M
Jan. 13, 2012 4:00p

/quotes/zigman/529424

Add CICHY to portfolio

CICHY

China Construction Bank Corp. ADS

$
14.74

-0.02
-0.14%

Volume: 40,028
Jan. 13, 2012 3:57p

/quotes/zigman/226360

Add FNMA to portfolio

FNMA

Fannie Mae

$
0.23

0.00
0.00%

Volume: 1.71M
Jan. 13, 2012 3:59p

/quotes/zigman/226335

Add FMCC to portfolio

FMCC

Freddie Mac

$
0.24

+0.0043
+1.82%

Volume: 690,965
Jan. 13, 2012 3:59p

Goldman Sachs Group Inc. (GS) said US
and Asian lenders will boost their share of commodity trade
financing as European banks curb loans, making disruptions in
the markets unlikely while traders’ borrowing costs may rise.

Jeffrey Currie, head of commodities research, commented
today in an interview in London.

“Thus far there is not much evidence of significant market
disruptions due to a lack of trade credits in Asia and America.
The core of disruptions seems to be within the European Union.
The overall stock of trade credits is unlikely to change
significantly, only the ownership, as European banks exit these
businesses and sell them to the US or Asian buyers.

”Ultimately, after the transfers are completed, the
lasting impact is that it will likely cost more for commodity
operators to access this type of funding.”

On the impact of trade finance difficulties on different
markets:

”Commodities are being impacted equally by the trade
finance problems, but the price reactions have been different.
This is because size of the impact relative to the market is
different and the underlying fundamental stories are different.

”Oil has much tighter inventories and is a much larger
global market, so it’s not reacting to the same degree as the
smaller markets. Other markets, say copper or aluminum, were
much harder hit because they are smaller markets, more exposed
to Europe and they have higher inventory levels from which de-
stocking could occur.”

To contact the reporter on this story:
Maria Kolesnikova in London at
mkolesnikova@bloomberg.net

To contact the editor responsible for this story:
Claudia Carpenter at
ccarpenter2@bloomberg.net

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(Updates with JPMorgan reserve-ratio cut forecast in third paragraph.)

Jan. 9 (Bloomberg) — Chinas December lending and money supply growth exceeded economists estimates, signaling monetary conditions may be easing as the nations central bank said it must be prepared for possible shocks from the US and Europe.

New loans totaled 640.5 billion yuan ($101 billion) for the month, exceeding the estimates of all 18 economists surveyed by Bloomberg. M2, a measure of money supply, rose 13.6 percent, compared with the 12.9 percent median of 18 estimates.

Peoples Bank of China Governor Zhou Xiaochuan said yesterday the nation must be ready to combat possible shocks from Europes debt crisis and an uncertain US economic outlook, echoing comments by Premier Wen Jiabao. The central bank will very likely follow up last months reduction in lenders reserve requirements with another cut this week, JPMorgan Chase amp; Co. said today.

This is better-than-expected monetary data, suggesting monetary conditions have started to ease, said Liu Li-Gang, a Hong Kong-based economist with Australia amp; New Zealand Banking Group Ltd., who previously worked at the World Bank. Liu said he expects that the central bank may cut the reserve requirement again before the Lunar New Year on Jan. 23. Such easing will help ensure a soft landing for the Chinese economy, he said.

The statement posted to the central banks website yesterday didnt contain a figure for Chinas foreign-exchange reserves, which are usually released with lending and money supply data issued at the end of each quarter.

External Shocks

Stocks in China rose. The Shanghai Composite Index was 1.5 percent higher at 10:53 am local time. The measure lost 1.6 percent last week.

The benchmark money-market rate had the biggest weekly decline since November last week as the central bank refrained from selling bills to help ease a cash shortage ahead of the week-long New Year public holiday. The seven-day repo rate rose 19 basis points to 4.50 percent as of 10 am in Shanghai.

The PBOC said Jan. 6 it will suspend debt sales ahead of the festival and buy securities from the market or financial institutions to boost liquidity if needed.

Zhou yesterday said in an interview with the official Xinhua News Agency that the global economy will face a string of difficulties in 2012 as a result of the European debt crisis, uncertainties in the US and slowing growth in emerging markets. China must be ready to pick appropriate policy instruments to combat external shocks, Zhou was cited as saying.

Relatively Difficult

Fighting inflation is not as urgent now as it was in early 2011, Xinhua cited Zhou as saying after a two-day meeting of financial regulators in Beijing. The National Financial Work meeting, which was attended by senior officials including Premier Wen, is held every five years to form development plans for the financial sector, Xinhua reported.

Wen last week pledged to fine tune monetary policy to preserve growth as business conditions in the first quarter may be relatively difficult. The nations export growth slowed in November to the weakest pace since 2009.

China is scheduled to release data for December exports, imports and trade balance tomorrow. Its also due to issue December inflation figures on Jan. 12 and data for annual 2011 and fourth-quarter economic growth on Jan. 17, according to the statistics bureau.

The central banks data yesterday showed that December money supply grew at the fastest pace since July. The 12.7 percent pace reported for November was the weakest since 2001.

Ease Liquidity

Lending in December was the highest monthly figure since April. The median estimate of 18 economists surveyed by Bloomberg was for 575 billion yuan of loans in the month.

49ers New Stadium Relies on Record Loans

Mayor Ed Lee says move is all but a done deal but there may be more to it than that.

Mumbai: Axis Bank Ltd, India’s third largest private sector bank by assets, is reducing dependence on large and medium companies as it seeks to cash in on an increase in individual lending opportunities in smaller towns.

The bank has set a target of increasing its retail loan portfolio to 30% of total loans, up from 21% at the end of September.

A file photo of Axis Bank, Barakhambha Road, New Delhi branch

Currently, large and mid-corporate loans make up for 55% of the bank’s loan book, which it expects to reduce in the next three years.

“In the short term, business will continue to be challenging but the long-term trend continues to be strong. The growth will come from smaller cities with metros continuing to grow,” said Jairam Sridharan, senior vice-president and head consumer lending and payments at Axis Bank.

The bank’s retail loan portfolio stood at Rs29,343 crore, or 21% of its total loan book of Rs1.4 trillion at the end of the September quarter.

Retail is one of the pillars of Axis’ vision 2015, which was adopted by Shikha Sharma after she took over as managing director and chief executive officer in April 2009.

Currently, half of the bank’s 1,200 branches are in smaller towns.

The bank also has 85 offices that do not take deposits but process loans in small towns such as Bhavnagar, Belgaum, Jhansi and Rohtak across India.

Shridharan said low penetration of home and car loans and card transactions in such towns makes it a big opportunity for banks.

“Residential real estate growth is taking a breather and so are domestic car sales. Card growth is now positive after two years of negative growth. But it is the tier-II and (tier-) III towns that are showing tremendous growth potential,” Sridharan said.

According to him, only 55% of the bank’s business currently comes from top eight cities compared to 75% three year ago.

Axis Bank’s strategy is similar to that of its larger rival HDFC Bank Ltd, which has steadily increased its retail book to exactly 50% of its loans by aggressively disbursing retail loans, feeding demand from the rural market.

HDFC Bank had lent an average of about Rs5,000 crore every month of the first quarter of fiscal 2012 to finance personal loans, commercial vehicles, auto and two-wheeler loans, which helped the bank’s retail business grow 30% year-on-year.

Axis Bank has seen a 26% compounded annual growth rate in retail loans since financial year 2007-08, giving it the confidence to increase its loan portfolio.

Currently, HDFC Bank has the largest retail portfolio after it overtook a cautious ICICI Bank Ltd, which had 60% of its loans coming from retail at one point.

Murli Gopal, research analyst at Brics Securities Ltd, said banks are focusing on retail to diversify their books in a tough economic scenario.

“Corporate loans are risky because they tend to be lumpy and one large delinquency in a scenario like this can have a negative impact. In retail, there is no such risk unless there is a systemic issue,” he said. India’s economy grew at 6.9% in the September quarter, the lowest since quarter ended June 2009.

However, banks have to have better underwriting methods before giving out these smaller ticket loans, Gopal said.

Sridharan said Axis Bank is aware of the risk management needed in selling these loans and it will follow a “conservative” policy in this regard.

“When the economy is slowing down, corporate loan demand also slows, so this is a good time to diversify for Axis which is still better placed than other private sector banks like Yes Bank Ltd who have a high dependance on corporate loans,” said Gopal, who has a ‘buy’ rating on the stock.

Axis Bank’s stock ended at Rs1,029 apiece on Monday, up 2.38% on BSE while the 30-share benchmark Sensex was at 16,805 points, down 0.25%. Local markets were closed on Tuesday.

joel.r@livemint.com

–>

Lending at PNC Bank, especially to business borrowers, has risen significantly this year, CEO James Rohr told analysts Tuesday.

New business loans increased by about $3.6 billion in the three-month period ended Sept 30 compared to previous quarter ended June 30 said Rohr, CEO of bank parent PNC Financial Services Group. Consumer loans increased by about $500 million.

We continue to see loan growth, said Rohr at the Goldman Sachs Financial Services conference in New York. He noted commercial real estate lending also has risen in recent weeks.

PNC wrote more business loans last quarter than originally planned, he said, and is experiencing growth in all of its 33 markets and across various industries. The bank also is on track to pick up some 1,200 new business borrowers in 2011, compared with an initial target of 1,000.

Plan to Mitigate Law School Student Loans Proposed by Yale Professors

Posted by Shannon Rasberry on Dec 6, 2011 in Student Loan Debt | 0 comments

As the debate over extreme student loan debt and the value of US law schools continues, two Yale Law School professors have proposed an idea they think will help reduce the number of struggling law school graduates. Law schools, the professors say, should pay underperforming students to drop out.

The idea, spurred by an overwhelming number of law school graduates who are entering a shrinking job market with six-figure debt from student loans, as well as allegations that many law schools deliberately inflate job data to make student loans seem affordable, is the brainchild of Ian Ayres and Akhil Reed Amar. The pair, in an article for Slate, said that law schools should seriously consider rebating half of a student’s first-year tuition if he or she decides to quit after the first year.

“A half-tuition rebate splits the loss of an aborted legal career between the school and the student. Each has skin in the game, so students will not go to law school lightly, and law schools will have better incentives not to admit students likely to fail,” the professors write.

The proposal comes as the debate over legal-education reform intensifies. In August, separate lawsuits were filed against New York Law school and Thomas M. Cooley Law School over allegations that the schools violated consumer protection laws by purposefully posting inflated employment data that mislead students about job prospects after graduation. A third law school, the Thomas Jefferson School of Law, was also sued over similar allegations.

Additionally, law schools have received public rebukes from federal lawmakers for their practices, while other law professors have come out with statistical analyses and assessments of just how risky a law school investment is. “Law school is a very risky (and expensive) investment; it should not be entered into lightly,” said Paul L. Caron, a professor at the University of Cincinnati College of Law.

Plan: Student Loans Should be Borrowed Based on Comprehensive Jobs Information

Ayres and Amar called for law schools to provide applicants with more comprehensive information about post-graduation employment instead of just reporting the percentage who are employed nine months after graduation. The professors said that laws schools should instead release employment data, including graduates’ annual salaries, for the first 10years after graduation, which matches the standard repayment period for federal student loans. The pair also said that law schools should break down the bar-passage rates for graduates based on grades and admission test scores and require students who are less than 50percent likely to pass the bar within three years of graduation to sign a special waiver (“Law School Not Working Out?” The Chronicle of Higher Education, Nov.29, 2011).

“Theres a psychological tendency to double down on a bad debt,” Amar said in an interview. Paying students to drop out “lets you walk away and not feel like a loser. Its your choice, but we want you to be fully informed.”

Michael A. Olivas, a professor of law at the University of Houston and president of the Association of American Law Schools, agreed that some schools game the system, but suggested that law schools “cant have all the worlds economic woes laid at our feet.” While law firms are hiring fewer lawyers, Olivas said that there are still plenty of opportunities in the market for law-school graduates.

“Most of these students are going to find their way if theyre willing to be flexible and to look more broadly,” Olivas said. “Not everyone is going to practice law in the traditional sense, and I dont think thats necessarily a bad thing.”

For:

The debt from student loans of current college students has recently surpassed $1 trillion and is continuing to climb.

The amount is larger than the credit card debt of the nation.

Tuition prices for secondary educational institutions are at an all time high.

Across the United States, both former students and current students are rejoicing over President Obamas new law that was recently passed by Congress.

This law will allow students to only have 10 percent of discretionary income annually to eligible borrowers.

In addition, this law will help the remainder of a former students debt eliminated after 20 years.

In addition to decreasing interest rates and lowering the number of years required for a loan to be paid off, this program offers individuals who spend 10 or more years in public service positions to have their loans forgiven at the ten year mark.

This cuts the time it would have taken for the loan to be forgiven without this law in half.

This program to help consolidate the debt acquired through student loans is absolutely a step in the right direction to helping these desperate students begin their lives without the overwhelming pressure of outrageously high monthly payments.

It is common for most students to believe that the higher degrees one earns, the higher paying jobs they can get.

As so many students are realizing, as they attain these higher, more expensive levels of education, the higher pay is just

not materializing.

As it is now, students hoping to earn higher degrees must do so with the understanding that whatever money they earn as a result of the education will go straight back into paying for that education, leaving them without the means to really begin their life as

a professional.

While speaking to the students of Colorado University in Denver, he stated, I know youre hearing stories from friends and classmates and siblings who are struggling to find work and youre wondering whats in store for your future. And I know that can be scaryhellip; This is something Michelle and I know about firsthand. Ive been in your shoes.

He went on to discuss that education is of the utmost importance in this country and stated we want you in school. But we shouldnt saddle you with debt when youre starting off.

What this program will do for those students, although it will not completely remove the strain, is lessen the day-to-day worry and struggle regarding their debt so that they can continue to build on what their education has given them.

The vast majority of college students will benefit from Obamas student loan plan.

Against:

Obamas plan to consolidate student loans and decrease the interest rates is nothing to praise.

The plans impact will only save students between $4 and $8 a month and wont help those students who are already suffering from debt.

Its no news to anyone that one of the many long-term issues that the U.S. economy faces is the debt acquired through student loans.

As the cost of education has drastically risen over the years and continues to rise, incomes remain the same.

A study by the New York Bureau of Economic Analysis found that student loans have increased by 511 percent since 1999, but meanwhile disposable income has only increased by 73 percent.

This plan would provide students who are taking out loans in the future with more manageable payments.

Although it will not benefit those who have already taken out loans in recent years, after all, arent the students who are in debt now the inspiration for this legislation?

So does it seem fair that they cannot reap any benefits from this new program?

The presidents program does not benefit students who took out loans prior to 2008 and who do not plan on taking out any future loans.

This alone cuts out a large percentage of the students who are suffering right now.

Even if you are included in the students who have oppressively high debt to pay off as a result of student loans, dont count on this helping you out at all if those loans were private.

Since this money is being funded by the federal government with money borrowed from the government, where will the remainder of the debt that has been forgiven come from?

Who is going to make up for that money?

It cant just disappear, so it will leave the government at a greater deficit rather than individual students with their

own debt which does not help anyone at all.

According to an analysis by finaid.org, that was based on the Department of Education data, the average students debt after attaining their bachelors degree coupled with this program would only save them approximately $4.75 to $7.75 per month.

The savings are clearly not an adjustment that will save the economy or greatly lessen the overwhelming debt.

This program excludes those students whose debt was the driver for the creation of the program in the first place.

It will barely scratch the surface of the average students debt from month to month, this program seems to be gaining greater hype than its worth.

In the last few months, Obama has announced two initiatives regarding student loans which he plans to execute in spite of our Congressional political process. One of them is a special consolidation for students in repayment of loans who have at least one loan under the old program, back when we had lender choice, and at least one in the Diect Loan program. This consolidation will be available from January through June 2012. Those special, lucky people will be contacted by the Department of Education and given the option to consolidate. Under this program, the loans retain their separate terms and conditions, and the borrower receives a 0.25% reduction in interest.

The second initiative is the Pay As You Go program. Obama has introduced this completely unoriginal idea as his own. This is actually the Income Based Repayment program, repackaged especially for you with a brand new name. The Income Based Repayment plan was signed into law by President Bush in 2007. Borrowers who sign up for this repayment program pay 15% of their income above the poverty line for their family size, per year, divided into monthly payments. After 25 years of payments, the balance is forgiven. In 2014, this program is scheduled for a change: 10% of the borrowers income above the poverty line and forgiveness after 20 years of payments. Sound familiar? It should. This is the exact terms of the new Pay As You Go program.

Germany Won’t Block Bundesbank IMF Loans, Merkel Ally Says
December 13, 2011, 9:54 AM EST

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• European Finance Ministers to Discuss Crisis as Confidence Wanes
• Belgium’s Rating Cut 2 Levels by Moody’s on Contagion Risk
• Juncker Expects EU to Meet Deadline on Channeling Loans to IMF
• Bundesbank Sees No ‘Urgent Need’ for Decision on IMF Loan
• Draghi Says There’s No ‘Savior’ for Countries That Won’t Act

By Brian Parkin

(Updates with Bundesbank comment in seventh paragraph, Merkel in ninth. For more debt-crisis news, click on EXT4.)

Dec. 5 (Bloomberg) — German Chancellor Angela Merkel’s government won’t stand in the way of Bundesbank help to fight the debt crisis by means of loans channeled through the International Monetary Fund, a senior Merkel ally said.

Germany is keen for the IMF to adopt a “decisive role” in combating the crisis alongside the European rescue fund, Michael Meister, the parliamentary finance spokesman for Merkel’s Christian Democratic Union, said today in a telephone interview.

“If the IMF says it needs more money, then it’s up to the Bundesbank to decide this in Germany’s case,” he said. “It’s not for lawmakers nor Frau Merkel’s government to decide or to interfere.” Lawmakers “would have a problem if political pressure was openly brought to bear on the bank, not with its decision.”

Merkel and French President Nicolas Sarkozy agreed at a meeting in Paris today to press fellow leaders at a Dec. 8-9 European Union summit to lock in tighter economic cooperation as a first step to snuff out the crisis now in its third year.

Euro-area finance ministers gave the go-ahead last week for work on a proposal to recycle central bank loans through the IMF that may deliver as much as 200 billion euros ($269 billion) to fight the crisis, two people familiar with the negotiations said.

‘Bigger Role’

“We’d be really pleased to have the IMF take on a bigger role,” Meister said. “We as Germans have always sought a decisive role for the IMF in fighting this crisis.”

The Bundesbank may be prepared to make loans to the IMF to combat the crisis, the Die Welt newspaper reported today, citing a November letter from the central bank’s president, Jens Weidmann, to German Deputy Finance Minister Joerg Asmussen. Article 123 of European rules regulating the single currency bans central banks from directly funneling cash to states to plug deficits, Die Welt said.

A spokeswoman for the Bundesbank declined to comment on the Die Welt report or on Meister’s opinion.

The need for a fresh anti-crisis measures became apparent as the effort to boost the 440 billion-euro European Financial Stability Facility to 1 trillion euros fell short. Central bank loans may be linked to adoption of tougher budget policing and tighter economic ties as espoused by Merkel and Sarkozy.

‘Sensible Combination’

“I believe that with the EFSF we have quite enough — maybe not as much money as some want, but we do have 250 billion euros there, we have a lot more flexibility,” Merkel told reporters in Paris today. “This money should also be used in a sensible combination with the IMF, if it is needed. So we are not standing here without any solution.”

Merkel has been at the forefront of efforts to strive for “fiscal union” through European treaty changes to create automatic, court-enforced sanctions on euro members that breach limits of 3 percent of gross domestic product on deficits and 60 percent of GDP on debt.

The chancellor also led the charge for private bondholders to automatically share in any losses under the permanent rescue fund from 2013, the European Stability Mechanism. While talks are ongoing about possible changes to the ESM, there are “very good reasons” for including clauses that force the private sector to share in any losses, Merkel said Dec. 2

Meister stepped up German resistance to watering down the private-sector involvement, saying there is an “urgent need” to move to a compulsory role from voluntary involvement as with Greece.

“We need to give markets very clear information on pricing in risks when buying new euro region sovereign bonds,” Meister said. “That’s where collective action clauses come in and with them clear procedure for investors in case a sovereign state should face insolvency. This should not be changed, that is our position.”

–With assistance from James G. Neuger in Brussels. Editors: Alan Crawford, Andrew Atkinson

To contact the reporter on this story: Brian Parkin in Berlin at bparkin@bloomberg.net.

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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