Browsed by
Tag: Banks and credit

Europe Financial

Europe Financial

Even if bank loans were more accessible and cheaper, the collapse of trust and the collapse of asset values mean that firms and households are more likely to savings than the expenditure of funds. For these reasons, Governor of the Bank of England Mervyn King, who is considered a pillar of sound financial policies, approved the government's proposed fiscal stimulus. Bank's Chief Economist Charlie Bean told the politicians that the weakness of the financial system may require a more 'aggressive' cutting interest rates. Leading politicians eurozone, perhaps instinctively wary of such an active policy. The German Government has to deal with low borrowing costs and has more or less balanced budget, so he has a great opportunity to spend money in support to the economy. But the package fiscal measures, which it unveiled in November, has been very modest – 12 billion euros for two years, that is only 0.25% of GDP. The European Commission has indicated that the prospect of a deep recession means that the rules under which budget deficits of EU countries should not exceed 3% of GDP, will not be rigidly applied. This gives some room for maneuver, France and Italy, the budget deficit is close to that limit.

Nevertheless, Germany has play an important role in the Commission's cost is estimated at 1,5% of EU GDP. Check with Nouriel Roubini to learn more. Somewhat more cautious than necessary, it seems, and the ECB policy. November 25, Lorenzo Bini Smaghi, a member of the board of the bank setting interest rates, said lower interest rates to protect against a deep recession could undermine confidence and limit freedom of action of politicians in the future. Nevertheless, the ECB held another rate cut. The IMF believes that the economic growth in the U.S. and Europe will begin in 2009. but employment will grow only some time after the end of the recession. So, after the economic crisis in the U.S.

in 1990. It took 15 months to unemployment reached maximum, and after the recession of 2001. Unemployment has grown more over 19 months. Judge Stephen Uiting Citigroup predicts that by mid-2010. Unemployment may reach a level of 9%. Currently, the largest economy peace plan to work together in order to prevent a global recession and reform global financial system. To this end the recent financial summit in Washington, leaders of the G-20 agreed to take joint efforts to ensure the liquidity of markets, support financial institutions, unfreeze credit markets, lower taxes to stimulate domestic demand. So who will recover more quickly – the United States or United Europe? Clear answer to this question is impossible. One can only assume that the pace of economic recovery will depend on the following factors: – the depth of the fall – the longer, bigger and more destructive will be crisis, the more difficult, in our opinion, the U.S. economy will return to the previous leading position – the U.S. housing market – the faster the "bottom", the more likely strengthen the dollar – Politics of Petroleum Exporting Countries – Will a change in settlement currency to the euro, which is extremely negative impact on the dollar – the effectiveness of anti-crisis measures taken by the U.S. government – the positive effect of the implementation of which in I and II quarters of 2009 will strengthen the dollar against the single European currency.

The Central Bank Buys Currencies

The Central Bank Buys Currencies

Strengthening of the ruble, which pottolknuli raising the price of oil, as well as the need for rubles to pay the taxes do not like the Central Bank. Everyone has long known that the exchange rate is strongly dependent on oil prices. Oil prices predictable, they can fly vrezultate military conflict between Israel and Palestine, can fall because speculators have decided to get rid of oil futures. Back in the fall by representatives of the Central Bank announced that the ruble is not will exceed 32 rubles to the currency basket in the spring, we are now seeing 39 – 41. It turns out that all the officials were wrong, weak central bank analysts. As officially announced the first deputy chairman Central Bank AG Ulyukayev, the Central Bank bought in March in the domestic market of about $ 10 billion. That is, the Central Bank deliberately buying the currency against the ruble.

Heating season came to an end respectively, the demand for oil should be reduced, as confirmed by the annual decline in oil demand in the spring. In February, the people carried money in banks for deposits in rubles, to believe that the ruble to fluctuate in a corridor of up to 41 rubles to the basket. It turns out again accumulated ruble money in banks. The Central Bank is the fourth trading day in a row entering the market with the purchase of currency, flattening trend in the strengthening of the ruble. Course dollar against the ruble this morning in the morning on the Moscow Interbank Currency Exchange reached 33.65 rubles, which is approximately 25 cents above Tuesday's closing levels at 35 cents above the current official rate. Note that the ruble against the dollar ureplyaetsya approximately 9 -10 cents a day, which shows on the downtrend appears to technical analysis, plus all the hidden fundamentals suggest the same thing, and if in the near time does not happen collapse of the ruble, it will be done artificially, but artificially maintain the ruble can only central bank, but as we see it is not its policy.