Daily Archives: February 1, 2010

Mexico’s central bank chief vows co-operation

February 1, 2010 9:30 pm by FT writers

By Adam Thomson, Mexico correspondent

The new head of Mexico’s central bank has promised closer co-operation with the government will underpin his six-year tenure, a move likely to heighten investor concerns about his institution’s independence.

Agustín Carstens, who took over the Bank of Mexico governor at the start of this year, told the Financial Times in an interview there was “huge scope for constructive interaction” with the centre-right administration of Felipe Calderón, president.

Such comments risk spooking investors, who fear his close links to Mr Calderón could make the bank more susceptible to political pressure. Keep reading.

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Posted in Banxico |

Roubini says Norway risks asset price bubble

February 1, 2010 6:06 pm by Emma Saunders

The Norwegian central bank is risking an asset bubble by keeping interest rates close to the US benchmark in order to contain krone gains and protect exporters.

So says Nouriel Roubini, NYU professor, and, more important these days, one of the few who correctly predicted the financial crisis. “Even in Norway there is no willingness to raise rates – despite inflation and robust growth – because of concerns about the currency. That means you are feeding real estate and other bubbles,” Mr Roubini told Bloomberg in Oslo today.

Continue reading: “Roubini says Norway risks asset price bubble”

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Posted in Norges Bank |

Fed: “Ladies and gentlemen, this is a bank.”

February 1, 2010 4:51 pm by Emma Saunders

“The only thing that may be missing is a basic knowledge of banking and what to consider in overseeing a bank.” Thus the Fed addresses green new bank directors in a website just launched.

The site – which includes a section called “What is a bank?” – should be laughable, were it not for recent history, which strongly suggests such training is needed.

Continue reading: “Fed: “Ladies and gentlemen, this is a bank.””

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Posted in Federal Reserve |

Thailand relaxes controls on capital outflows

February 1, 2010 4:24 pm by Emma Saunders

The Bank of Thailand has ended restrictions on the amount Thai firms can invest abroad, raised the foreign investment limit for Thai mutual funds to $50bn from $30bn and cleared the way for wealthy Thais to spend more in overseas property markets, deputy governor Bandid Nijathaworn told a news conference.

The changes will reverse the effects of capital controls imposed in 2006 during a political crisis. The Thai stock exchange announced yesterday that it too would soften regulations, to encourage the listing of companies worth Bt100bn ($3bn).

Increased outflows could help exporters by holding down the baht, which has risen 0.4 per cent against the dollar this year after gaining 4.6 per cent in 2009 as Asia’s third-strongest currency.

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Posted in Uncategorized |

Argentine saga outlives Redrado

February 1, 2010 3:48 pm by Emma Saunders

Central bank governor Martin Redrado has gone, but the story continues. It transpires the Argentine President may seek changes to the central bank’s charter to allow the government to tap the institution’s reserves, an Argentine newspaper has said.

Cristina Fernandez de Kirchner and her husband, lawmaker Nestor Kirchner, want to be able to use the reserves to help create jobs or finance infrastructure projects, said La Nacion, without stating its source. Apparently the proposal may be sent to Congress next month.

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Posted in Bank of Argentina |

Ralph Atkins ECB study findings could slow rate rise

February 1, 2010 1:43 pm by Ralph Atkins

The eurozone is likely to be significantly worse affected than the US economy by the drying-up of bank lending, according to research published by the European Central Bank just days before its next interest-setting meeting.

The results of a study into the links between bank lending and eurozone growth could strengthen the hands of those on the ECB’s 22-strong governing council urging caution as it unwinds emergency measures taken to shore up the financial system.

Continue reading: “ECB study findings could slow rate rise”

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Posted in European Central Bank |

Economic news headlines

February 1, 2010 1:33 pm by Emma Saunders
  • Bank of England faces QE dilemma, especially after mortgage data
  • ‘Volcker plan’ is not enough, says Volcker – Calc Risk
  • Mixed Aussie data casts doubt on rate rise tomorrow – Aust Biz
  • China in Davos: ‘No quick changes to currency’ – M&C
  • Swiss Franc returns to trading range after apparent SNB action Friday – FT
  • India tightens policy without raising rates – WSJ
  • Flowchart decision tree for Greece – BarCap via zero hedge
  • US Bank failures in 2010 on higher trend than 2009 or 2008 – Calc Risk
  • Obama plans smaller-than-expected $100bn jobs push – FT
  • UK insurers face €15bn rise in capital requirements under Solvency II – FT
  • Loan drought worse for Europe than US – FT
  • Sign of the times: Davos protestors want exchange-traded derivatives – FT
  • BoJ chief: recovery is failing to spread – Bloomberg
  • Israeli central bank denies housing bubble – Money Supply
  • ‘Best to separate monetary policy from regulation’ – VoxEU
  • St Louis Fed chief Bullard says deflation risk has ‘passed’ – FT
  • Post Redrado: Kirchners eye control of central bank – FT

Quote of the week:

“What we see in the United States is a statistical recovery and a human recession” – Larry Summers at Davos

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Posted in Uncategorized |

Vietnam follows China in restraining bank loans

February 1, 2010 12:09 pm by Emma Saunders

Vietnam’s central bank has asked the country’s largest bank by assets to slow loan growth in general, but to increase rural lending. The Chinese recently made the same requests of several Chinese banks (1, 2).

The State Bank of Vietnam has asked unlisted Agribank to limit loans this year to 20 per cent, after their loan book grew 24.4 per cent last year. Agribank should also increase its proportion of rural loans to at least 75 per cent in 2010, from 68.3 per cent last year, governor Nguyen Van Giau was quoted as telling the lender at its annual meeting last Friday.

Agribank can probably withstand the extra risk: its bad debt ratio stood at 2.6 per cent of loans last year, against its own target maximum of 5 per cent.

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Posted in Uncategorized |

UK: the start of the ‘W’?

February 1, 2010 11:27 am by Emma Saunders

Surprise data from the Bank of England shows mortgage approvals fell in December – the first drop in more than a year. Analysts had expected the number of loans to rise.

So, while expecting an increase of 3.1 per cent, the number of mortgage approvals actually fell by 1.7 per cent, the Bank of England said today.

Continue reading: “UK: the start of the ‘W’?”

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Posted in Bank of England |

Israeli central bank: ‘no bubbles here’

February 1, 2010 10:46 am by Emma Saunders

The governor of Israel’s central bank has denied the country is experiencing a property bubble. “We have a problem of real estate market and people call it a bubble. But this is not a bubble,” Professor Stanley Fischer said at the tenth annual Herziliya conference.

Bubble denials are always tantalising, as only time can confirm or deny them, with ample room for speculation in between. House prices rose 5.6 per cent in 2009, contributing to an inflation rate of 3.9 per cent last year. This does not settle the bubble question, of course. We need to know about supply and demand.

Continue reading: “Israeli central bank: ‘no bubbles here’”

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Posted in Uncategorized |

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Chris Giles Chris Giles has been the economics editor of the Financial Times since 2004. Based in London, he writes about international economic trends and the British economy. Before reporting economics for the Financial Times, he wrote editorials for the paper, reported for the BBC, worked as a regulator of the broadcasting industry and undertook research for the Institute for Fiscal Studies. RSS

Ralph Atkins, Frankfurt bureau chief, has been writing about European economics and politics for the Financial Times for more than 20 years following an economics degree from Cambridge. He has been watching the European Central Bank and eurozone economies since 2004. He has previously worked in London, Bonn, Berlin, Jerusalem and Brussels. RSS

Robin Harding is the FT's US economics editor, based in Washington. Prior to this, he was based in Tokyo, covering the Bank of Japan and Japan's technology sector, and in London as an economics leader writer. Robin studied economics at Cambridge and has a masters in economics from Hitotsubashi University, where he was a Monbusho scholar. Before joining the FT, Robin worked in asset management and banking. RSS

Claire Jones is Money Supply economics team writer, based in London. Before joining the Financial Times, she was the editor of the Central Banking journal and CentralBanking.com. Claire studied philosophy and economics at the London School of Economics. RSS

James Politi is US economics and trade correspondent for the Financial Times, based in Washington DC. He joined the Washington bureau in January 2008 following four and a half years as US deals correspondent covering M&A and private equity. James Politi joined the FT in London in 2000 with an MSc at the London School of Economics, and undergraduate degrees from Georgetown University and the University of Florence. RSS

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