The Fed will reduce the maximum maturity on discount window loans from 90 to 28 days in January, “in light of the continued improvement in financial market conditions.” The Board of Governors has just announced a “reduction in the maximum maturity of primary credit loans at the discount window for depository institutions to 28 days from 90 days effective January 14, 2010″. Extending the discount window was one of the first measures adopted by the Fed when the crisis struck. (from Bloomberg) Read more
Forget commercial real estate, the next shoe to drop is private equity. Apparently, private equity firms themselves are not the problem, it’s the companies they own, which employ some 7.5 million workers in the US alone. Private equity firms buy up struggling companies, aiming to turn them round and flog them off. The purchases are often highly leveraged using short-term loans, which are coming due. One estimate is that half of those companies will fail between 2012 and 2014.
Roubini argues further unemployment is on the way and Jeffrey Immelt, GE chief, has joined predictions of a second stimulus in the US. So the IMF’s speech this weekend was timely: Strauss-Kahn said the IMF should provide global financial insurance Read more
Andrew Bailey, the Bank of England’s head of banking services, has just given details on how he hopes regulation can help solve the “too important to fail” issue. His list of what a future bank like Lehmans would have to do is quite an eye-opener writes Chris Giles of the Financial Times. Read more
In the great Japanese debate on how to balance the contradictory demands of reining in the deficit and continuing stimulative spending, chalk up another political point for Shizuka Kamei, Japan’s minister for financial services. Read more
As a competition, it is not meant to be taken entirely seriously, but Christine Lagarde, France finance minister, is named today as the Financial Times’ European finance minister of the year. She was rated by the judges for her political skills – especially at global summits - and France’s economy has performed significantly better than most of its rivals during the crisis.
I am not so sure if the European Central Bank would approve of the choice. Read more