Put another way, a poor quality bank bond that no one wants because the bank is in trouble is suddenly high quality debt if the Fed is prepared to swap it for a Treasury bond.
Last year, retiring Chairman John Bond hosted the bank s board in Bombay and Delhi.
Another quasi-government security is a bank bond with a guarantee from the Federal Deposit Insurance Corp.
The ECB reportedly now wants to allow senior bank bond-holders to be the first to absorb losses.
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And third, the ECB governing council would itself have to decide that central bank bond purchases are also needed.
In the meantime, the bonds will be traded on an inter-bank bond market.
Or is that 77.5%, with the 22.5% being actual money and the rest conditional (ie, really, a bond in the bank).
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Some key data about bond purchases by Bank of Cyprus - now the focus of a controversial EU-IMF bailout - is missing, investigators have found.
Inflationary price shocks, layoffs, bond defaults and bank system failures ensue.
Investors in U.S. Treasurys will closely watch the Federal Reserve's policy statement this week, and any talk of reining in central-bank bond purchases could hit a nerve.
Sian believes Portugal will need 42 billion euros to cover its sovereign debt payments, 36.8 billion euros for its bank bond redemptions, and 10.5 billion euros to recapitalize its banks.
Most bank bond purchases have been of debt issued by their own governments, and this reinforces the interdependence of weak banks and weak governments that has deepened the crisis over the past two years.
Using a combination of junk bond debt and bank financing, Singleton and his 87-year-old partner, Richard Scudder, are masters at bunching smallish suburban and hick-town papers around metro areas and skimming off advertising revenue that would otherwise go to the big paper in the city.
The model for personal accounts would be the federal Thrift Savings Plan. (Millions of federal workers currently get their choice of well-diversified funds that are regulated for safety and soundness.) Participants could avoid the equity markets altogether by opting for government bond funds and bank CDs.
Stable-value funds typically consist of a diversified bond portfolio combined with bank or insurance-company "wrap" contracts.
"Expectations of bank support now are getting priced into the market, " said the head of European sovereign-bond trading at a global bank.
In the first half of 2012 European companies raised more money from the bond markets than from bank loans, according to Dealogic (see chart).
This week a subordinated bond issued by Sakura Bank was trading at a whopping seven percentage points over Libor, the rate at which the healthiest banks borrow.
Preoccupied with collapsing economies, rocketing bond yields and possible bank runs, European leaders have understandably paid less attention to the nuances of the constitutional shenanigans in Hungary or Romania.
The settlement terminates credit default swaps Morgan Stanley purchased from MBIA to protect holdings of commercial mortgage-backed securities and resolves the pending litigation between the two and will see an undisclosed cash payment from the bond insurer to the bank.
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The bulk of that money is now being raised by forcing losses on large deposit holders as well as bond holders in Laiki bank, which will be split into a bad bank of toxic assets and a remaining viable core business.
Erica Meloe, a physical therapist in New York City, counts herself as one of the lucky private sector workers with a vested pension she earned while working for 10 years as a trader and bond specialist for Deutsche Bank.
And Belgium, France and - to a tiny extent - Luxembourg are also providing guarantees that lenders of up to 90bn euros to Dexia over the coming ten years would get their money back (they are guaranteeing up to 90bn euros of inter-bank and bond funding for up to a decade).
Imagine a lowly rated energy bond and top-notch bank paper in the same structure.
The ESM is an integral part of the European Central Bank's bond-buying scheme, announced on Thursday.
If rates remain unchanged in May 2012 the Bank of Oklahoma bond yield will be 1.09%.
Some Federal Reserve officials have also been calling for an early end to the central bank's bond-buying program.
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