A GUIDE TO QUANTITATIVE EASING October 6, 2011 Q.WHAT DID QE DO LAST TIME? A.The Bank of England says the £200bn of QE between March 2009 and January 2010 boosted the economy by between 1.5 and two per cent – but it also raised CPI inflation by between 0.75 and 1.5 per cent. Q.WILL IT WORK NOW? A.It works primarily by increasing the [...]
KING TURNS ON THE ELECTRONIC PRINTING PRESS October 6, 2011 “Clearly the impact of the rest of the world on the UK does threaten our recovery. That is why we took action today to try to head that off.” SIR MERVYN KING “The evidence shows it will keep interest rates down and boost demand and that will be a help for British families.” GEORGE OSBORNE [...]
Trichet bows out with support plan for banks October 6, 2011 JEAN-CLAUDE Trichet signed off as president of the European Central Bank (ECB) yesterday, sticking to his guns over interest rates yet pledging to pump funds into the banks. Trichet’s press conference was far calmer than last month’s, when he railed against criticism and demanded that “congratulations” be extended to the ECB for delivering price stability. [...]
QE2 sees stocks surge as pound drops sharply October 6, 2011 MARKETS were rocked yesterday after the Bank of England announced its even higher than expected extension of its quantitative easing. Stocks soared in afternoon trading, the FTSE closing a whopping 3.7 per cent higher on the day, at 5291.26. Yields on government debt initially plummeted on the news of the Bank’s extra £75bn of asset [...]
Dexia shares suspended as bailout looms October 6, 2011 SHARES in Dexia were suspended yesterday as Belgium prepared to nationalise its arm of the ailing bank. The stock plunged 17 per cent to €0.85 as tempers frayed between France and Belgium over how to divide the bill for its latest rescue. Didier Reynders, the Belgian finance minister, said his nation did not want to [...]
WHAT THE OTHER PAPERS SAY THIS MORNING October 6, 2011 FINANCIAL TIMES WHITEHALL FEARS NEW BAILOUT FOR RBS Nervousness is growing in Whitehall that the government might have to inject further capital into Royal Bank of Scotland as part of a European effort to recapitalise the continent’s banking system. RBS received the biggest bail-out of the 2008 crisis GOULD LEADS RACE TO BECOME BG CHAIRMAN [...]
FSA checks up on RBS’s bad property book October 6, 2011 THE City watchdog is examining Royal Bank of Scotland’s portfolio of troubled commercial property loans, as the Eurozone debt crisis causes fresh volatility in property prices, industry sources said yesterday. The Financial Services Authority wrote to Derek Sach, head of RBS’s Global Restructuring Group, last week after sending its officers to quiz staff and monitor [...]
Europe mulls plan for more stress tests October 6, 2011 EUROPE’S banking watchdog refused to rule out a new stress test of the region’s banks yesterday, but played down expectations that it would act quickly to resolve fears over their risky sovereign debt levels. The European Banking Authority said it had not announced any new bank stress test. It would not confirm or deny whether [...]
LCH.Clearnet to take gold as collateral for trades October 6, 2011 CLEARING house LCH.Clearnet yesterday added gold to the list of assets investors can post as collateral against trades in light of the meteoric rise in demand for the safe haven metal. LCH will accept gold in 400 troy ounce gold bars from the end of October as it joins a group of highly liquid and [...]
France said to have a plot to shore up banks October 6, 2011 FRANCE’S government plans to take stakes in its biggest banks if they suffer huge losses from falls in the value of their sovereign debt holdings, a French newspaper reported yesterday. Le Figaro newspaper said the government agency that manages state shareholdings had been working for a few days on how it would act if it [...]
