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☆ The stock market has cooled off to start 2024, but it's still checking most of the bull market boxes
▼ + stars: | 2024-01-13 | by ( Michael Santoli | ) www.cnbc.com time to read: +8 min

The small-cap Russell 2000 has dropped close to 4% against a fractional gain in the S & P 500 year to date. In broad terms, the S & P 500 could retreat to 4600 or so – about 4% down from here – and still be in a routine technical check-back to its latest launch point in early December. Todd Sohn of Strategas notes that the Invesco S & P 500 Equal Weight ETF (RSP) saw inflows go vertical last year to $13.5 billion, 30% above its prior 12-month record. Betting on 'peacetime' Fed cuts Right or wrong, the market debate right now can never get far before turning into a Fed-policy-path discussion. Last week's CPI and PPI data added to the market's collective conviction that inflation's downside momentum is strong, opening the way for "peacetime" Fed rate cuts.

Persons: that's, Russell, Ned Davis, Tim Hayes, Tony Pasquariello, Goldman Sachs, Henry McVey, KKR's, McVey, Morgan Stanley, Todd Sohn, Strategas, they're, Jerome Powell Organizations: Ned Davis Research, Goldman, Nasdaq, Apple, CPI, PPI Locations: U.S

☆ JPMorgan Chase profit falls after $2.9 billion fee from regional bank rescues
▼ + stars: | 2024-01-12 | by ( Hugh Son | ) www.cnbc.com time to read: +3 min

JPMorgan Chase said Friday that fourth-quarter profit declined after paying a $2.9 billion fee tied to the government seizures of failed regional banks last year. The bank said quarterly earnings slipped 15% to $9.31 billion, or $3.04 per share, from a year earlier. Excluding the fee tied to the regional banking crisis and $743 million in investment losses, earnings would have been $3.97 per share, according to JPMorgan. The bank said it generated nearly $50 billion of profit in 2023, $4.1 billion of which came from First Republic. The Federal Deposit Insurance Corporation hit large U.S. banks with a special assessment to replenish losses from a fund that helped uninsured depositors of seized regional banks.

Persons: JPMorgan Chase, Jamie Dimon, Dimon Organizations: JPMorgan, LSEG, Revenue, First, First Republic, Federal Deposit Insurance Corporation, Federal Reserve, Fed, KBW, CNBC PRO Locations: U.S, First Republic, Ukraine

☆ Some options trades for avoiding an asset bubble and other macroeconomic troubles
▼ + stars: | 2024-01-11 | by ( Michael Khouw | ) www.cnbc.com time to read: +9 min

There are some trades for investors looking to avoid a possible asset bubble and other potholes that could be ahead. The standard 30-year fixed mortgage rate rose even further, a function of both the rising risk-free rate and the rising spread. Buying bonds has interest rate risk. Moreover, the spread between mortgage rates and Treasuries is unusually high. Risk-free rates stay static or even rise mildly, but if the spread narrows mortgage rates could fall, a tailwind for a mortgage portfolio.

Persons: There's, Murray Rothbard, Milton Friedman, Ben Bernanke, Bernanke's, Janet Yellen, Jerome Powell, Howard Marks, Charlie Munger, Berkshire Hathaway, Marks, Steve Eisman, Neuberger Berman, they've Organizations: Federal Reserve, Fed, Federal Reserve Bank, Vanguard Value, Technology, MBS Locations: U.S, deflate, Berkshire

☆ Theory About the Fed, Inflation, and Rates That May Wreck the Economy
▼ + stars: | 2024-01-11 | by ( Neil Dutta | ) www.businessinsider.com time to read: +11 min

After spending the past two years trying to get inflation under control by raising interest rates, the Fed is inching toward cutting rates soon. Setting interest rates should be about weighing costs and benefits for everyone, not engineering outcomes for a favored constituency. When people (usually those with a vested political interest) try to accuse the Fed of being biased, it erodes confidence. The real reason for the accusationsThe entire conspiracy theory about a political Fed is weak on its face and baseless on its merits. What makes anyone so sure they'll fare better in 2024 with the rate of inflation slowing, interest rates falling, and stocks rising?

Persons: there's, it's, Joe Biden's, Jerome Powell, Donald Trump, Biden, It's, Trump, Ro Khanna, Powell, Taylor, Bill Dudley, Dudley, Dudley's, Chris Waller Organizations: Federal Reserve, Fed, Democratic, Trump, Biden, New York Fed Locations: Canada, Australia, Japan

☆ 'Twice as cheap': These stocks' discount to the S&P 500 is double its average, Ritholtz’s Brown says
▼ + stars: | 2024-01-05 | by ( Ganesh Rao | ) www.cnbc.com time to read: +2 min

Overseas stocks are significantly undervalued compared to the U.S. stock market and present an opportunity for investors in 2024, according to Ritholtz's Josh Brown. The fund had a total return of 20% in 2023, compared to 26% for the S & P 500. The MSCI index is currently priced at 12.8 times earnings, compared to the S & P 500's 20 times, according to Morningstar data. Yet Brown, who co-founded Ritholtz in 2011, believes overseas stocks could still outperform if central banks cut interest rates. Correction: This article has been updated to reflect that Ritholtz's Josh Brown said global stocks' discount to the S & P 500 is double its historic average.

Persons: Ritholtz's Josh Brown, Brown, CNBC's, ACWI, Josh Brown Organizations: Wealth Management, U.S, ETF, Morningstar Locations: Japan, Europe, U.S

Meanwhile, there is growing excitement that the U.S. Securities and Exchange Commission will approve the first ever bitcoin ETF, after years of opposition. With all of this excitement comes some quite bold predictions about bitcoin's price. "No rationale for that prediction," Mobius said, except that a bitcoin ETF looks likely and "that has heightened interest" in the cryptocurrency. Yang attributes the anticipated price rise to a bitcoin ETF being approved, leading to higher institutional investment in bitcoin, as well as May 2024's bitcoin halving, which would result in the bitcoin supply being constrained. Alexander told CNBC that during the first quarter of 2024, bitcoin will trade within the $40,000 to $55,000 range, owing to "professional traders creating volatility."

Persons: Filip Radwanski, Bitcoin, bitcoin, FTX, Sam Bankman, Fried, Binance's Changpeng Zhao, Mark Mobius, Mobius, Yang, Luna, James Butterfill, Butterfill, Antoni Trenchev, Trenchev, Carol Alexander, Alexander, Coinbase, Matrixport Organizations: Getty, CNBC, Department of Justice, U.S, U.S . Securities, Exchange, Chartered, University of Sussex, Exchange Commission, SEC, Fidelity, Blackrock, Federal Reserve Locations: U.S, bitcoin, Blackrock

Here are 6 signals investment bankers are watching as they pray for an M&A rebound in 2024. By contrast, activity from private equity firms "was off almost 40%," he said. In 2021, private equity firms transacted $1.5 trillion across 2,869 deals, according to Dealogic. Last year, private equity M&A made up 40% of total activity, according to Goldman Sachs. AI companies, many of which are only now being formed, need to mature, and the winners and losers need to come into focus, bankers said.

Persons: Wall, LSEG, Goldman Sachs, Vito Sperduto, Sperduto, we've, Stephan Feldgoise, Hess, Anthony J, Carfang, Cash, Goldman, Goldman's Feldgoise, Feldgoise, Mark Sorrell, I'm, Harold M, Lambert, Jerome Powell, Greg McBride, McBride, Jonathan Gray, dealmaking, Gray, Rob Chisholm, Chisholm Organizations: Fed, London Stock Exchange, Business, RBC Capital Markets, Conference Board, Conference, Federal, Goldman, Federal Reserve, Private, Bankers, DOJ, FTC, Federal Reserve Board, Bankrate, of Labor Statistics, Cisco, LSEG, Qatalyst Partners, Citi, & $ Locations: LSEG, Ukraine

☆ JPMorgan nailed its 2023 forecast for European stocks. Here’s its 2024 call
▼ + stars: | 2023-12-06 | by ( Ganesh Rao | ) www.cnbc.com time to read: +2 min

JPMorgan predicts European stock markets will struggle to produce positive returns next year as investors digest slowing economic growth across the continent. The forecast for 2024 comes from the same team of strategists that have, so far, accurately called the MSCI Eurozone's performance this year. They expected the index to rise 9.1% to close at 256 points by the end of December 2023 on a local currency basis. "We look for flat European [earnings per share] growth in 2024, based on no recession materializing," said JPMorgan strategists led by Mislav Matejka in a note to clients on Nov. 29. The JPMorgan strategists believe stocks will sink in the first half of 2024 as markets factor in potential downward adjustments to earnings estimates.

Persons: Mislav Matejka, CNBC's Michael Bloom Organizations: JPMorgan, FTSE

☆ An EU wealth tax and the end of U.S. capitalism: One bank’s ‘outrageous’ predictions for 2024
▼ + stars: | 2023-12-05 | by ( Elliot Smith | ) www.cnbc.com time to read: +2 min

An EU wealth tax, the "end of capitalism" in the U.S. and a major health crisis arising from obesity drugs are just some of the "outrageous predictions" put forward by Saxo Bank in a report published Tuesday. Heading into 2024, the Danish investment bank suggested the world is at an "inflection point, with the familiar road of the last decade coming to an end." The predictions focus on a "series of unlikely but underappreciated" events that if they were to occur, would "send shockwaves across the financial markets." This would be rendered more likely if the population "realises how little in tax billionaires are actually playing," he speculated, with social unrest frequently simmering across the continent. In the Netherlands, it is even better to be a billionaire, as the average tax rate is below what US billionaires pay, Garnry noted.

Persons: Irene, I've, Steen Jakobsen, Robin Hood, Peter Garnry, Garnry Organizations: Saxo Bank, CNBC, EU, European Union, Equity Locations: Lower Manhattan , New York, EU, U.S, Ukraine, North America, East Asia, France, Netherlands

☆ Morning Bid: RBA holds and the dollar pauses, too
▼ + stars: | 2023-12-05 | by ( ) www.reuters.com time to read: +2 min

Pedestrians walk past the main entrance to the Reserve Bank of Australia building in central Sydney, Australia, October 3, 2016. The relative U.S. interest rate outlook right now fits the weaker dollar narrative - futures markets are pricing in bigger rate cuts by the Fed next year than by any other major or emerging market central bank. But will the Fed cut rates by 125 basis points next year? Doubts about that prospect have for now put the brakes on dollar selling. Gold , which shot to a record high in Asia's notoriously thin morning hours on Monday, has recoiled sharply.

Persons: David Gray, Tom Westbrook, Edmund Klamann Organizations: Reserve Bank of Australia, REUTERS, Bank, Aussie, Fed, Bank of Japan, Reuters, Thomson Locations: Sydney, Australia, Asia, U.S, Europe, Tokyo

☆ ECB hawk Schnabel scraps more rate hikes after 'remarkable' inflation drop
▼ + stars: | 2023-12-05 | by ( ) www.reuters.com time to read: +4 min

Euro zone inflation tumbled to 2.4% last month from above 10% a year earlier after a record string of rate hikes. Schnabel, who had insisted just a month ago that rate hikes must remain an option because the "last mile" of the inflation fight may be the toughest, said she had shifted stance after three unexpectedly benign inflation readings in a row. "The most recent inflation number has made a further rate increase rather unlikely." "The recent inflation print has given me more confidence that we will be able to come back to 2% no later than 2025." Schnabel said weak growth as a result of the ECB's rate hikes is helping the inflation fight but that a deep or prolonged recession is unlikely, with recent survey data supporting expectations for a recovery.

Persons: Isabel Schnabel, Jim Urquhart, Schnabel, John Maynard Keynes, Christine Lagarde, Francois Villeroy de, Yannis Stournaras, Joachim Nagel, Balazs Koranyi, Catherine Evans Organizations: European Central Bank, Teton, Jackson, REUTERS, Rights, ECB, Reuters, Bank of Greece, Thomson Locations: Jackson , Wyoming, U.S, French, Francois Villeroy de Galhau

☆ Central bank blunders undermine tough rate talk
▼ + stars: | 2023-12-05 | by ( Francesco Guerrera | ) www.reuters.com time to read: +8 min

Comments by central bankers underline their desire to keep interest rates high until price growth quiesces. Policymakers’ recent mistakes mean they will struggle to convince investors their tough talk is real. U.S. Federal Reserve Chair Jay Powell says his fellow policymakers are “not thinking about rate cuts at all”. In May, after another U.S. regional bank failure, markets concluded that the Fed’s rate hike at the beginning of that month would be its last. Respected central bankers might be able to convince markets that these numbers don’t portend imminent rate cuts.

Persons: Jay Powell, Christine Lagarde, Andrew Bailey, Powell, backtrack, –, Lagarde, Treasuries, BoE, Bailey, Ben Bernanke, Jacob Frenkel, Peter Thal Larsen, Oliver Taslic, Thomas Shum Organizations: Reuters, Traders, U.S . Federal, European Central Bank, Bank of England, titans, Deutsche Bank, Treasury, Reuters Graphics Reuters, LSEG, Silicon Valley Bank, Fed, ECB, Bank of Israel, Federal Reserve, European, Thomson Locations: Silicon, Bailey, United States, Ukraine, Central

A worker is reflected in a wall of the Reserve Bank of Australia (RBA) head office in central Sydney, Australia, March 1, 2016. REUTERS/David Gray/File Photo Acquire Licensing RightsDec 5 (Reuters) - A look at the day ahead in Asian markets. The relative U.S. interest rate outlook right now fits the weaker dollar narrative - futures markets have the Fed cutting rates next year more than any major or emerging market central bank. And even if the Fed does go that far, other central banks are sure to lower their policy rates more than markets are currently predicting. Here are key developments that could provide more direction to markets on Tuesday:- Australia interest rate decision- Japan - Tokyo inflation (November)- South Korea inflation (November)By Jamie McGeever Editing by Josie KaoOur Standards: The Thomson Reuters Trust Principles.

Persons: David Gray, Michele Bowman's, Philip Lowe, Jamie McGeever, Josie Kao Organizations: Reserve Bank of Australia, REUTERS, Reserve Bank of, Reuters, Bank of Japan, U.S, Thomson Locations: Sydney, Australia, Japan, South Korea, Asia, masse, Tokyo

☆ Morning Bid: Gold makes the running as oil fails to fire
▼ + stars: | 2023-12-04 | by ( Wayne Cole | ) www.reuters.com time to read: +3 min

Oil failed to sustain an early rally that followed news of attacks on commercial shipping in the Red Sea. Notably, oil prices lost early gains and Brent eased around 57 cents to $78.31 a barrel amid doubts that OPEC+ would be able to maintain planned output cuts, particularly by some African countries. At the same time, U.S. oil output is at record levels above 13 million barrels a day and rig counts are still rising. A commodity faring better is gold, which surged suddenly this morning to top $2,111 an ounce for the first time before paring the gains to $2,086. Yields on U.S. two-year notes rose almost 4 bps, but that follows a drop of 40 bps last week.

Persons: Alexander Manzyuk, Wayne Cole, Treasuries, Yemen's, Brent, Bundesbank, Christine Lagarde, Bonds, Goldman Sachs, Anna Breman, Riksbank, Edmund Klamann Organizations: REUTERS, Bulls, ECB, Thomson Locations: Novosibirsk, Siberian, Russia, Wayne, Red, U.S, Saudi Arabia

LONDON (AP) — Spotify says it's axing 17% of its global workforce, the music streaming service's third round of layoffs this year as it moves to slash costs while focusing on becoming profitable. Spotify had used cheap financing to expand the business and “invested significantly” in employees, content and marketing in 2020 and 2021, the blog post said. But Ek indicated that the company was caught out as central banks started hiking interest rates last year, which can slow economic growth. In June, it cut staff by another 2%, or about 200 workers, mainly in its podcast division. Tech companies like Amazon, Google, Microsoft, Meta and IBM have announced hundreds of thousands of job cuts this year.

Persons: Daniel Ek, “, Ek, ” Organizations: Spotify, ”, Tech, Google, Microsoft, Meta, IBM Locations: ” Stockholm

☆ European markets set for mixed open as traders weigh 2024 central bank cuts; gold hits record high
▼ + stars: | 2023-12-04 | by ( Elliot Smith | ) www.cnbc.com time to read: +1 min

LONDON — European markets are set for a mixed open, potentially pausing a significant global rally as traders bet on interest rate cuts from major central banks in 2024. Gold prices notched a fresh record high on Monday for a second consecutive day, with spot prices touching $2,100, with analysts citing geopolitical uncertainty, a likely weaker U.S. dollar and possible interest rate cuts as further catalysts for bullion heading into next year. The upward momentum continued despite Fed Chair Jerome Powell's efforts to temper market expectations for incoming rate cuts, as he argued it was "premature to conclude with confidence" that monetary policy was "sufficiently restrictive." U.S. stock futures were fractionally lower in early premarket trade on Monday as some caution returned. Shares in Asia-Pacific were also mixed on Monday with investors awaiting a fresh round of economic data on Tuesday, and key inflation readings later in the week.

Persons: DAX, Jerome Powell's Organizations: LONDON, U.S . Federal, Dow Jones Locations: Frankfurt, Germany, Asia, Pacific

☆ Central banks, regulators responsible for climate-resilient financial system: Ravi Menon
▼ + stars: | 2023-12-04 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailCentral banks, regulators responsible for climate-resilient financial system: Ravi MenonRavi Menon, managing director of the Monetary Authority of Singapore, discusses the role of central banks and financial regulators in the climate crisis on a COP28 panel hosted by CNBC's Dan Murphy.

Persons: Ravi Menon Ravi Menon, CNBC's Dan Murphy Organizations: Monetary Authority of Locations: Monetary Authority of Singapore

☆ Global banks face negative outlook, property stress in 2024 - Moody's
▼ + stars: | 2023-12-04 | by ( ) www.reuters.com time to read: +2 min

REUTERS/Toby Melville/File Photo Acquire Licensing RightsLONDON, Dec 4 (Reuters) - Sluggish global growth, a higher risk of borrowers defaulting on loans and pressure on profitability mean that banks face a negative outlook in 2024, credit rating agency Moody's said on Monday. Pockets of stress in property markets in the Asia-Pacific region were also likely to continue, the report said. Moody's said in its report that it expected money to remain tight next year, lowering economic growth even as central banks are expected to start cutting rates. China's growth is also set to slow amid muted spending by consumers and businesses, weak exports and an ongoing property crunch, the report said. However, capital levels - which underpin the financial soundness of banks - are expected to broadly hold up, the report said.

Persons: Toby Melville, Moody's, Felipe Carvallo, Iain Withers, Chizu Organizations: Bank of, REUTERS, Moody's Investors Services, Bank, Moody's Investors Service, Thomson Locations: Canary, Bank of England, London, Britain, United States, Europe, Asia, Pacific

☆ Asia shares turn mixed, gold tops $2,100 an ounce
▼ + stars: | 2023-12-04 | by ( Wayne Cole | ) www.reuters.com time to read: +5 min

MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) was still up 0.4%, led by gains in South Korea and Australia. Trade figures for China are due later in the week with the recent trend being softening exports to the U.S. overshadowing gains in Asia. S&P 500 futures dipped 0.1%, after finishing at a 20-month high on Friday, while Nasdaq futures lost 0.2%. The dive in yields and the dollar has been a boon for non-yielding gold, which added 0.9% to $2,088 an ounce, after hitting a record of $2,111.39 an ounce . Oil prices have not been so fortunate, amid doubts OPEC+ will be able to maintain planned output cuts.

Persons: Goldman Sachs, Jerome Powell, Claudio Irigoyen, Joachim Nagel, Christine Lagarde, Brent, Wayne Cole, Sam Holmes Organizations: Nikkei, payrolls Shipping, Japan's Nikkei, FTSE, Nasdaq, Federal Reserve, Bank of Japan's, European Central Bank, ECB, Sea, Thomson Locations: Red Sea, SYDNEY, U.S, Israel, Red, Asia, Pacific, Japan, South Korea, Australia, China, Canada

☆ Gold prices have never been this high
▼ + stars: | 2023-12-04 | by ( Anna Cooban | ) edition.cnn.com time to read: +4 min

London CNN —Gold prices hit an all-time high Monday, buoyed by growing expectations of interest rate cuts among investors, a weaker dollar and geopolitical tensions. “This has created a more favorable environment for gold as a non-yielding asset.”John Reade, a market strategist at the World Gold Council, an association of gold producers, told CNN that, with investors predicting several rate cuts over the next year, gold prices could “quite possibly” shoot above Monday’s record high. Since gold is priced in US dollars, the fall in the greenback’s value has made it less expensive for investors outside the United States to buy the metal, which should have boosted demand and, in turn, lifted gold prices. Gold prices have risen 10% so far this year. According to the World Gold Council, central banks in emerging markets bought 473 metric tons (521 tons) of gold a year on average between 2010 and 2021.

Persons: ebbs, Daria Efanova, ” John Reade, Jamie Dimon, ” Reade, “, Reade, ” Organizations: London CNN —, US Federal Reserve, Treasury, Sucden, World Gold Council, CNN, Interactive Investor Locations: United States, Russia, Ukraine, Israel, Gaza, China, South China, Taiwan, Russian

The moon rises over the Toronto city skyline as seen from Milton, Ontario, Canada, January 23, 2016. REUTERS/Mark Blinch/File Photo Acquire Licensing RightsTORONTO, Dec 4 (Reuters) - Canadian banks had a mixed fourth quarter but a common theme underlining all the reports was the rise in bad loan provisions, signalling that lenders were strapping in for a shaky economy. Impaired loans related to residential mortgages, real estate and construction were also higher from the prior quarter, indicating that the banks were also being cautious when considering underwriting new loans. He noted that despite the mixed results, the banks reported healthy capital levels, giving investors assurance that the banks remain resilient. Reuters Graphics($1 = 1.3559 Canadian dollars)Reporting by Nivedita Balu in Toronto; Editing by Mark PorterOur Standards: The Thomson Reuters Trust Principles.

Persons: Mark Blinch, Verecan, Colin White, Dave McKay, Mike Archibald, Nivedita Balu, Mark Porter Organizations: REUTERS, Rights, Reuters, Bank of Canada, BOC, Royal Bank of Canada, CIBC, National Bank, Scotiabank, BMO, RBC, Reuters Graphics Reuters, AGF Investments, Reuters Graphics, Thomson Locations: Toronto, Milton , Ontario, Canada

☆ After 3 years of pain, America has finally achieved economic nirvana
▼ + stars: | 2023-12-03 | by ( Neil Dutta | ) www.businessinsider.com time to read: +11 min

The October jobs report — with the economy adding just 150,000 jobs and the unemployment rate ticking up to 3.9% — was a disappointment. Of particular notice, the unemployment rate has increased by half a percentage point over the past six months. A simple way to show that things are still in balance is to look at Okun's law, a relationship between movements in the unemployment rate and economic activity. The historical record shows that once it rises half a percentage point, the unemployment rate tends to rise even more. The unemployment rate is already above the Fed's year-end forecast of 3.8% — the first time that's happened since March 2022.

Persons: Jerome Powell, it's, It's, we're, What's, what's, Neil Dutta Organizations: Federal Reserve, Fed, Macro Locations: joblessness, nonfarm payrolls

Dec 4 (Reuters) - A look at the day ahead in Asian markets. The dollar shed 3% in November, its biggest monthly fall in a year, and last week fell for a third week in a row. Many will argue that the U.S. bond and rates markets have gotten far too carried away, and that the Fed will not ease so quickly and aggressively next year. But Fed policymakers are now in their 'blackout period' ahead of the December 12-13 policy meeting. In stark contrast to the Fed, rates futures markets are barely pricing in any rate cuts from the RBA next year at all.

Persons: Wall, Jerome Powell, Jamie McGeever, Diane Craft Organizations: Treasury, Reuters, Reserve Bank of Australia, Thomson Locations: Zealand, Australia, India, South Korea, Philippines, Thailand, Japan, Korea

☆ Case for gold fever: NewEdge Wealth sees record rush intensifying
▼ + stars: | 2023-12-02 | by ( Meredith Mutter | ) www.cnbc.com time to read: +2 min

The record gold rush may intensify into year-end. According to NewEdge Wealth's Ben Emons, the final month of the year typically creates a bigger appetite for the yellow metal. We get a recession maybe, maybe not," said Emons. "At the same time, gold rallies when there's this risk-on feel in the markets, and that's really when real rates and interest rates are declining. In a note to clients this week, Emons wrote that months for both gold and stocks are a "rare combo."

Persons: NewEdge Wealth's Ben Emons, It's, CNBC's, Gold, Emons, Guy Adami Organizations: Dow

☆ Bank of England drags Bagehot into the shadows
▼ + stars: | 2023-12-01 | by ( Liam Proud | ) www.reuters.com time to read: +8 min

That is no longer tenable, in part because of reforms to bank regulation that shifted activity from traditional lenders to financial market players. These days, the institutions in need of urgent liquidity are just as likely to be pension funds, insurers or hedge funds. The British central bank’s initial ideas make sense, but only solve part of the problem. The central bank can short-circuit the panic by opening the credit taps. Central banks are only just starting to grapple with what it means to be a lender of last resort in that context.

Persons: Walter Bagehot’s, Andrew Hauser, BoE, WALTER, Gurney, Peter Thal Larsen, Streisand Neto, Thomas Shum Organizations: Reuters, Bank of England, Reuters Graphics Reuters, U.S, Treasury, Federal Reserve, Pensions, . Treasury, Citadel, Millennium Management, City of, U.S . Federal, Gurney & Company, Victorian, Thomson Locations: British, City, City of London, Basel, Overend, Lombard

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