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Banks In The Dark Over $15 Billion of Promised Rosneft M&A business

Banks that assist Russian oil company Rosneft finance its $55 billion buyout of rival have been left waiting for their payback a share in $15 billion in asset sales projected to follow the deal.

State oil company Rosneft’s takeover of this year aimed to generate a major oil group producing more oil than however it also tightened the Russian government’s grip on the country’s energy sector.

The asset sales promised by Rosneft Chief Executive Igor Sechin would offload less-profitable businesses to turn the company into the major oil player the CEO has stated he wants it to be. The delay demonstrate Rosneft has a lot on its plate integrating and that the sales are on the back burner.

Rosneft had dangled the juicy divestment mandates at the banks in exchange for a $29.8 billion loan the largest in Russia’s history on good terms, all the lending banks are waiting. We thought asset sales and refinancing bonds would kick start straight following the closing.

Rosneft’s slow motion is annoying the banks as they would earn fat fees from advising the oil giant on the asset sales this year, which would assist boost M&A revenues in an otherwise arid deal making landscape.

M&A activity across all sectors is losing 7 percent in Europe, Africa and Middle East since January partly due to the impact of the euro zone crisis on business confidence.

Banks that uphold big balance sheets throughout the financial crisis have been hoping to use this muscle to win lucrative M&A advisory business from competitor which had to shrink partly to meet tough European capital rules.

Banks frequently use their balance sheets to offer cheap loans to corporate clients to secure higher margin business such as share or bond issues or M&A work.

Big balance sheets helped Deutsche Bank and Barclays to achieve number 2 and 3 rankings in M&A league tables previous year, challenging US rival Goldman Sachs which had the top slot.


American economy is sluggish and Fed Chairman Ben Bernanke is the accelerant

It look similar to just like yesterday Bernanke adviser Alan Greenspan confess to Congress that he found a flaw in the free market principles that drove America’s monetary policy for his term as Fed chairman, America to figure out that self regulated free markets did not work.

Unfortunately nothing changed and Greenspan handed off to Bernanke. And that same faulty principle is still misleading world’s 192 central banks and the America’s central bank headlong into another disaster greater than 2008. And the chain of command over the confirmation is obvious, Greenspan begning with Reagan. Then Bernanke with George W. Bush accumulating further eight years of fiscal policies and failed monetary.

Currently, Bernanke and Obama policies prolonged, favoring banks with their high pace, cheap money printing presses. And if America’s speed up debt is the metric, historians are previously judge Greenspan strictly. In future, history will be even firm on Bernanke, He never learned the lesson that Greenspan’s failed free market ideology harshly smashed the American economy.

Hiding behind the fantasy of today’s current stock market records is an economy and markets that are highest, close to crashing. However their leaders are in rejection. A new economic bubble is blowing greater than the 1990s, greater than Wall Street’s credit reduced, both driven by the same defective monetary principles that’s now a bug spreading across America’s political system.

The Institute of International Finance which groups 450 banks stated that if central banks carry on to flood money into the global economy then any outlook bid to get it under control could itself weaken the financial system and quantitative easing, very low interest rates, cannot stay forever, however the risk is that financial markets have become captivated to them.