• World equity markets are under pressure as fears continue to build over a Greek default. There is also some disappointment with the lack of G7 action to deal with the slowdown in global growth. Greek and Portugal CDSs are out to record levels. From Reuters.
• Some of France’s largest private-sector banks are likely to suffer rating downgrades as the euro zone crises intensifies. Bank shares have been bludgeoned of late reflecting the complexity of the situation and a slowing global economy. Soc Gen is down almost 50% since August 1. Credit Agricole and BNP Paribas are both down over 30% in that period. From the Wall Street Journal.
• Greece is set to impose a new property tax to cover 2B euro of shortfall in this year’s budget, which will be submitted the first week of October. The news was met with unrest. From the Wall Street Journal.
• Citi dramatically cuts U.S. banks’ profit estimates by 45% for the third quarter reflecting the global growth slow down and a challenging trading environment. From Bloomberg.
• Support for a new EU treaty to increase economic coordination is growing among larger European nations. Comments from the G7 meeting suggest that UK and German officials see the need for greater coordination and tougher constraints on national government spending policies and debt levels. From the Wall Street Journal.