Forex Blog

September 26, 2013

Ex ECB Head Trichet: EU Banking Union Needed Now

Europe must make a decision as soon as possible on setting up a strong central authority to handle failing lenders, a key plank of establishing a successful banking union, former European Central Bank (ECB) president Jean Claude Trichet urged on Thursday.

Although European Union lawmakers earlier this month granted new powers to the ECB to oversee banks in the euro zone, the challenge of setting up a single euro zone authority to handle failed banks remains.

Trichet, speaking to CNBC on the sidelines of the SkyBridge Alternatives (SALT) conference in Singapore, said establishing such a body was crucial.

CNBC

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December 12, 2012

BoC Carney Proposes Changing Central Bank Targets from Inflation to GDP

Mark Carney, who will take over as governor of the Bank of England next year, has suggested targeting economic output instead of inflation.

At the moment, the Bank’s job is to aim for an inflation target of 2%.

Targeting gross domestic product (GDP) that has not been adjusted for inflation would mean the economy would have to catch up with previous shortfalls, Mr Carney said in a speech.

He said it might be a good option when interest rates were near zero.

Mr Carney is currently governor of the Bank of Canada.

He said one problem with changing the target would be that “people must generally understand what the central bank is doing – an admittedly high bar”.

It was his first speech since the unexpected announcement of his appointment to the Bank of England (BoE) top job.

Targeting the country’s economic output rather than inflation would be a major change to monetary policy, although it is not within the power of the Bank to change its target.

Targeting inflation has been a key plank of economic orthodoxy around the world for decades.

A central bank could make it clear how high inflation or unemployment would have to go before interest rates would be increased, he suggested.

via BBC

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June 30, 2010

European Banks Borrow Less Than Expected

The European Central Bank said today that it is making up to 131.9 billion euros ($161.5 billion) in loans available to European banks for the next three months. This is considerably less than expected and suggests that banks are in better financial shape than thought originally.

Banks tomorrow need to repay 442 billion euros in 12-month funds, the biggest amount ever awarded by the ECB and a key plank in its efforts to fight the financial crisis last year. Demand for the three-month cash today was a litmus test for the health of Europe’s banking system, economists said.

Demand was “surprisingly low and certainly a lot less than markets expected,” said Nick Kounis, chief European economist at Fortis Bank NV in Amsterdam. “It suggests that while there are certainly stresses in the system in some regions, it’s not as bad across the board as many people thought.”

Source: Bloomberg

Canada’s GDP Remains Unchanged

Statistics Canada reported that after seven straight monthly increases, GDP remained unchanged in April. Retail trade fell during the month, but these losses were offset by increases in mining, wholesale trade, the public sector and construction.

Source: The Canadian Press

Oil Falls Below $77

Filed under: OANDA News — Tags: , , , , , , , — admin @ 1:18 pm

Oil fell to $76.79 in Europe today following yesterday’s stock market losses. News that Germany’s jobless rate declined to 7.5 per cent helped give European stocks a much-needed boost, although most Asian stock markets fell following a 2.7 per cent drop Tuesday in the Dow Jones industrial average.

Investors are now bracing for the US Non-Farm Payroll employment report due Friday morning.

“We don’t see Friday’s jobs report saving us from what seems to be course set for a double-dip recession,” analyst Cameron Hanover said in a report.

Source: Associated Press

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