It's official: people in Ireland literally raided their piggy banks as they were hit by some of the toughest austerity measures and the longest recession in Europe. The Central Bank of Ireland issued less than half the number of coins last year than in 2008 and actually took €23m (£19m) worth of coins out of circulation in 2009, because of extra supply from coin jars at home, data showed.
It's official: people in Ireland literally raided their piggy banks as they were hit by some of the toughest austerity measures and the longest recession in Europe.
The Central Bank of Ireland issued less than half the number of coins last year than in 2008 and actually took €23m (£19m) worth of coins out of circulation in 2009, because of extra supply from coin jars at home, data showed.
European regulators have accused Germany and its banks of reneging on a deal to publish full details of sovereign debt holdings, as part of the four-month-long stress test exercise of the country's banking sector.In an interview with the Financial Times, Arnoud Vossen, secretary-general of the Committee of European Banking Supervisors, the pan-European banks regulator, said: "We agreed with all supervisory authorities and with the banks in the exercise that there would be a bank-by-bank disclosure of sovereign risks."...But six of the 14 German banks tested - Deutsche Bank, Postbank, Hypo Real Estate, mutual groups DZ and WGZ, and Landesbank Berlin - did not publish the expected detailed breakdown of sovereign debt holdings, although Postbank disclosed some information on Sunday. Every other European bank, bar Greece's ATEbank, which failed the test, complied with the disclosure requirement.
In an interview with the Financial Times, Arnoud Vossen, secretary-general of the Committee of European Banking Supervisors, the pan-European banks regulator, said: "We agreed with all supervisory authorities and with the banks in the exercise that there would be a bank-by-bank disclosure of sovereign risks."...But six of the 14 German banks tested - Deutsche Bank, Postbank, Hypo Real Estate, mutual groups DZ and WGZ, and Landesbank Berlin - did not publish the expected detailed breakdown of sovereign debt holdings, although Postbank disclosed some information on Sunday. Every other European bank, bar Greece's ATEbank, which failed the test, complied with the disclosure requirement.
The market is doing its own stress test calculations and coming up with radically different answers: JP Morgan thinks 54 banks fail their version of the tests. Barcap is picking at the funding mechanism that would be needed if there was `real' stress, beyond that envisaged in the undemanding official scenarios.
Chinese banks are facing serious default risks on more than Rmb1,550bn ($228bn) in loans they have lent to local governments across the country, according to senior Chinese officials.In a preliminary self-assessment carried out at the request of China's banking regulator, the country's commercial banks have identified about one-fifth of the Rmb7,700bn lent to local government financing vehicles, which are mostly used to fund regional infrastructure projects....Since the start of this year, top Chinese bankers and regulators have publicly warned that many of the loans used to boost growth through massive infrastructure spending and a property boom will eventually go bad. "The risks in government-backed financing vehicles, the property industry and sectors with overcapacity problems are particularly worth noting," CBRC chairman Liu Mingkang said last week in a prepared statement on risks in the banking system....But analysts say the apparent success of the clampdown on lending actually disguises a worrying new trend that involves banks co-operating with lightly regulated trust companies to keep loans off their books.
In a preliminary self-assessment carried out at the request of China's banking regulator, the country's commercial banks have identified about one-fifth of the Rmb7,700bn lent to local government financing vehicles, which are mostly used to fund regional infrastructure projects....Since the start of this year, top Chinese bankers and regulators have publicly warned that many of the loans used to boost growth through massive infrastructure spending and a property boom will eventually go bad.
"The risks in government-backed financing vehicles, the property industry and sectors with overcapacity problems are particularly worth noting," CBRC chairman Liu Mingkang said last week in a prepared statement on risks in the banking system....But analysts say the apparent success of the clampdown on lending actually disguises a worrying new trend that involves banks co-operating with lightly regulated trust companies to keep loans off their books.
A new NBER working paper by Jing Wu, Joseph Gyourko, and Yongheng Deng (also discussed by Joseph Cotterill and Tyler Cowen), used recorded prices for 300 residential land auctions in Beijing to develop the first constant-quality land-price series for a Chinese market. The study concludes that inflation-adjusted constant-quality land prices have increased by nearly 800% since 2003:Q1, with half that increase occurring over the past two years. Source: Wu, Gyourko, and Deng (2010).
Source: Wu, Gyourko, and Deng (2010).
Hu Xiaolian, deputy governor at the Chinese central bank, has released a paper which suggests it's soon time for China to peg the yuan to a basket of foreign currencies, rather than the U.S. dollar alone. This especially makes sense for China given that, going forward, the U.S. might not the voracious consumer it once was. Thus tying itself at the hip to the dollar might not be as useful as it was before. Hu Xiaolian: Compared with pegging to a single currency, the exchange rate regime with reference to a basket of currencies will help adjust exports and imports, current account, and balance of payment in a more effective manner.
This especially makes sense for China given that, going forward, the U.S. might not the voracious consumer it once was. Thus tying itself at the hip to the dollar might not be as useful as it was before.
Hu Xiaolian:
Compared with pegging to a single currency, the exchange rate regime with reference to a basket of currencies will help adjust exports and imports, current account, and balance of payment in a more effective manner.
I am somewhat disappointed that this site has not picked up on the impact of the yuan tether break to other Pacific currencies. Australia will likely take a hit in the commodities - pushing their property bubble into a burst. Further, there is a big push to pay off debt coupled with ETS (emission trade schema). In New Zealand, there is a big bump in general service tax that is hitting around the same time that the ETS hits. Now, if you un-peg the yuan and it surges up, the pacific region will collapse (and I mean like a tree falling).
is this accurate?
And Australia? Their economic success of recent years is at least in part built on commodity sales to China. I can well imagine that a decline in the commodity trade does enough damage to burst the AU property bubble.
Of course, on the other hand, if we assume China manoeuvres in such a way as to keep it's economy buoyant it is still going to need raw materials and I'm unclear who the competitors to AU are and in what position they are to take advantage of exchange rate shifts.
For example, the Foxconn site (up to 800,000 employees) is seemingly leaving the mainland (will still be in Taiwan), but they will pass their business to other sites they control in other nearby countries. It doesn't make sense that this would be bad for them (in purely Serious economic terms, of course.) Never underestimate their intelligence, always underestimate their knowledge.
Frank Delaney ~ Ireland
Europe's top competition watchdog has opened probes into IBM over concerns that the US company may have abused its dominant position in the multibillion-dollar market for mainframe computers.Antitrust officials at the European Commission said on Monday that they were initiating two formal investigations against the company - one resulting from complaints received over the past 18 months and a second on the Commission's own initiative.
Antitrust officials at the European Commission said on Monday that they were initiating two formal investigations against the company - one resulting from complaints received over the past 18 months and a second on the Commission's own initiative.
The government put banks on notice today that it "stands ready" to intervene if a lack of lending to businesses threatens the economic recovery. At the same time, it set out a number of ideas to help businesses obtain finance in the downturn.As business secretary Vince Cable published a green paper on financing private sector recovery, he warned banks that one of the "sticks" that could be used against them if they refused to lend or paid out excessive dividends and bonuses was a tax on profits.
As business secretary Vince Cable published a green paper on financing private sector recovery, he warned banks that one of the "sticks" that could be used against them if they refused to lend or paid out excessive dividends and bonuses was a tax on profits.
