ECB fined Crédit Agricole with nearly €5m - Possibility for Short positions

The European Central Bank imposed three fines totally around €5m. on various departments of Crédit Agricole for violating the rules on how banks should classify their first-class capital assets.

The ECB's unified oversight mechanism imposed on Crédit Agricole €4.3 million - the second biggest penalty in the history of SSM - to violate the capital classification procedure. CA Consumer Finance received fines of €200,000 and Crédit Agricole Corporate and Investment Bank filed €300,000 for similar offenses.

The ECB indicated that the sanctions had fallen to a number of incidents in several consecutive quarters in 2016 and in some cases in 2015, when the French bank classified certain equity instruments as the highest quality or CET1 capital. Best-quality capital buffers are designed to put pressure on a bank in case of market turmoil.

Crédit Agricole stated that it "took note of complaints about which it was notified" and that "it reserves the right to challenge these penalties." The Bank may challenge the judgment in the Court of Justice of the European Communities.

Technically, since the beginning of the year, the company has undergone a downward and steady trend. Upon the last correction in the upward direction, the price reaches a key level of resistance formed by a major diagonal, horizontal, and 38.2% Fibonacci trend adjustment. We then see a decrease, and at the moment signals from the indicators that a second correction is possible in the upward direction. It is then that we can position Short with the most stony stop possible. DeMarker is located in an over-sales area and points up - positive for the price. Sequential counts 7 of the possible 9 bottom probability of a bearish pulse and probability of a short-term upward. Given the foundation, it is a good idea to take the action out of the Watch List and, when adjusting, to position Short with a maximum short stop.

Source: Financial Times

Charts: Used with permission of Bloomberg Finance L.P.

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