DIRS.INFO The most relevant business & tech news

☆ ECB's Lagarde warns some fiscal policies in Europe could fuel excess demand
▼ + stars: | 2022-12-02 | by ( ) www.reuters.com time to read: +2 min

BANGKOK, Dec 2 (Reuters) - European Central Bank President Christine Lagarde warned on Friday that some European governments' fiscal policies could lead to excess demand, and that fiscal and monetary policies need to work in synch for sustainable, balanced economic growth. "Fiscal policies that create excess demand in a supply constrained economy might force monetary policy to tighten more than would otherwise be necessary," Lagarde said at a conference hosted by the Bank of Thailand and Bank for International Settlements in Bangkok. "We need higher investment and structural reforms to remove the supply constraints and ensure that potential output is not impaired by the changing global economy. "And in a world where external demand is more uncertain, we will also need to strengthen the domestic supply and demand through higher productivity growth," she said. Its rate on bank deposits was increased by 200 basis points to 1.5% in three months.

☆ Crypto winter highlights gold’s warming qualities
▼ + stars: | 2022-11-25 | by ( Edward Chancellor | ) www.reuters.com time to read: +7 min

That’s why crypto pioneers developed stablecoins, which peg their market price to old-fashioned fiat currencies. The FTX founder agreed that digital tokens were impossible to value since they generated no cash flow. In other words, the entire crypto world has the mechanics of a Ponzi scheme. In such a nightmare scenario, access to a decentralised, anonymised type of digital money could prove indispensable. In this world bitcoin serves as the lifeboat for civilisation, offering protection against both anarchy and the surveillance state.

☆ Breakingviews: Crypto winter highlights gold’s warming qualities
▼ + stars: | 2022-11-25 | by ( Edward Chancellor | ) www.reuters.com time to read: +7 min

LONDON, Nov 25 (Reuters Breakingviews) - The crypto winter is bitterly cold. The FTX founder agreed that digital tokens were impossible to value since they generated no cash flow. In other words, the entire crypto world has the mechanics of a Ponzi scheme. In such a nightmare scenario, access to a decentralised, anonymised type of digital money could prove indispensable. In this world bitcoin serves as the lifeboat for civilisation, offering protection against both anarchy and the surveillance state.

☆ NY Fed: Bank liquidity may be tighter than thought, with policy implications
▼ + stars: | 2022-11-18 | by ( Michael S. Derby | ) www.reuters.com time to read: +4 min

Banks view their daily reserve balance levels as "scarce resource," the paper's authors said, adding "even in the era of large central bank balance sheets, rather than funding payments with abundant reserve balances, we show that outgoing payments remain highly sensitive to incoming payments." "There is still a potential for strategic cash hoarding when reserve balances get sufficiently low," the researchers wrote. Meanwhile, bank reserves are at $3.18 trillion, down about $1 trillion from a year ago. The Fed has expressed confidence it can draw down reserves in a way that will not affect its interest rate target. The paper suggests the way banks are managing liquidity, even in a time of ample liquidity, could challenge that view.

☆ Sam Bankman-Fried did financial system a favour
▼ + stars: | 2022-11-15 | by ( Peter Thal Larsen | ) www.reuters.com time to read: +5 min

LONDON, Nov 14 (Reuters Breakingviews) - Sam Bankman-Fried has tipped the cryptocurrency industry into crisis. But the spectacular implosion of FTX, the exchange he founded, has done the broader financial system a big favour. Bankman-Fried, widely known as SBF, was eager for regulators in the United States and elsewhere to recognise crypto exchanges like FTX. In that sense, he’s done the financial system a favour. FTX founder Sam Bankman-Fried has previously told Reuters some of the transfers out of FTX were a result of “confusing internal labelling”.

At the COP27 climate conference in Egypt, companies and country delegates are discussing ways of enhancing the market for green bonds, or bonds that are linked to projects deemed environmentally beneficial. POPULAR DESPITE THE 'GREENIUMS'Also known as "use of proceeds bonds," green bonds involve a company or government raising money for projects considered environmentally beneficial. SUSTAINABILITY-LINKED BONDSSustainability-linked bonds, or SLBs, comprise a newer and smaller market than green bonds. SOCIAL BONDS, SDG BONDS, AND MOREBeyond bonds focused on environmental outcomes, lie pools of money for related goals around social equity or fair living standards. Social impact bonds, or impact bonds, differ from social bonds in linking financial returns to the desired outcome.

☆ Japan foreign reserves fall for third month after intervention
▼ + stars: | 2022-11-08 | by ( Tetsushi Kajimoto | ) www.reuters.com time to read: +3 min

Japan's foreign reserves fell for a third consecutive month to $1.19 trillion as at the end of October, still the world's second-largest after China, the ministry said. The currency intervention and rising foreign bond yields more than offset other factors that would support reserves, such as higher valuations of other foreign assets and income gains from foreign bond holdings, officials said. Of the reserves, foreign bonds fell the most in September and suffered the second-largest drop last month to $941 billion. Separate data on intervention, which includes quarterly and daily totals, confirmed that authorities did not conduct stealth intervention in September, having spent 2.8 trillion yen that month to support the yen. Japan spent a record 6.35 trillion yen on intervention last month as the yen hit a 32-year low near 152 yen to the dollar.

☆ France, Singapore, Switzerland jointly test central bank digital currencies
▼ + stars: | 2022-11-02 | by ( ) www.reuters.com time to read: +1 min

LONDON, Nov 2 (Reuters) - France, Singapore and Switzerland have launched a joint trial of their experimental central bank digital currencies (CBDCs) in the first cross-regional trial of its kind. AMM protocols are designed to combine pooled liquidity with algorithms to determine the prices between two or more digitally tokenised assets such as currencies. They are seen as having the potential to be the backbone of the financial market infrastructure needed for digital currencies to be traded between countries. Cecilia Skingsley, at the Bank for International Settlements central bank umbrella group overseeing the project, which aims to deliver proof of concept by the middle of next year, said it marked the first collaboration across regions and that she expected more to follow. Around 90% of the world’s central banks are either using, trialling or looking into CBDCs.

☆ Japan spent record $42.8 bln in October interventions to prop up yen
▼ + stars: | 2022-10-31 | by ( Tetsushi Kajimoto | ) www.reuters.com time to read: +4 min

The 6.3499 trillion yen ($42.8 billion) was broadly in line with the estimates of Tokyo money market brokers who thought Japan had likely spent up to 6.4 trillion yen over two consecutive trading days of unannounced interventions. A steep drop in the yen to a 32-year low of 151.94 to the dollar on Oct. 21 likely triggered the intervention, followed by another one on Oct. 24. However, the amount was nearly double the 2.8 trillion yen Tokyo spent last month in its first yen-buying and dollar-selling intervention in more than two decades. The interventions helped to trigger an immediate drop in the dollar of more than 7 yen on Oct. 21, and another dollar fall to the yen by around 5 yen on Oct. 24 albeit temporarily. "This suggested that the Japanese authorities will continue to attack market players selling off the yen beyond 150 yen."

☆ Japan likely spent record amount in October to prop up yen
▼ + stars: | 2022-10-31 | by ( Tetsushi Kajimoto | Wayne Cole | ) www.reuters.com time to read: +3 min

A compilation of estimates by Tokyo money market brokers indicates that Japan likely spent a record 5.4 trillion yen ($24.9 billion) over two consecutive trading days of unannounced intervention on Oct. 21 and 24, in reaction to a steep drop in the yen to a 32-year low of 151.94 to the dollar on Oct. 21. That would be nearly double the 2.8 trillion yen Tokyo spent last month in its first yen-buying and dollar-selling intervention in more than two decades. The latest intervention helped to trigger an immediate drop in the dollar of more than 7 yen, but the Japanese currency has since come under renewed pressure. The Ministry of Finance will announce on Monday at 7 p.m. (1000 GMT) the total amount spent for intervention from Sept. 29 to Oct. 27. Indeed, Japan's top currency diplomat, Masato Kanda, has said there was no limit to the authorities' resources for conducting intervention.

☆ Libor demise and Brexit reshape derivatives market, says BIS
▼ + stars: | 2022-10-27 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

"The most significant factor contributing to the decline in turnover is the continuing shift away from Libor for major currencies," the BIS said in its latest triennial snapshot of the global OTC interest rate derivatives market. Banks and their clients use interest rate swaps to insure themselves against unexpected moves in borrowing costs. Replacing Libor shrank turnover in forward rate agreements or FRAs, a type of derivatives contract, with turnover in dollar FRAs tumbling by 98%. BIS OTC Derivatives Graphic 1Sales desks in Britain recorded the highest turnover of interest rate derivatives, at $2.6 trillion, or 46% of global 'net-gross' turnover, down from 51% in 2019. BIS OTC Derivatives Graphic 2Reporting by Huw Jones; Editing by Toby ChopraOur Standards: The Thomson Reuters Trust Principles.

☆ Central banks get sucked into financial black hole
▼ + stars: | 2022-10-14 | by ( Edward Chancellor | ) www.reuters.com time to read: +7 min

Central bankers around the world want to bring inflation down by returning interest rates to “normal” levels. As a result, the average UK mortgage has grown to 3.4 times average income, up from 1.5 times in the early 1980s, according to housing analyst Neal Hudson. But it’s left many homeowners extremely vulnerable to higher interest rates. As a result, the government’s fiscal position is more exposed to interest rate fluctuations. As a financial black hole opens up, central banks will be forced to stop tightening.

☆ Sovereign debt greens yet net-zero pledges darken
▼ + stars: | 2022-10-13 | by ( George Hay | ) www.reuters.com time to read: +5 min

LONDON, Oct 13 (Reuters Breakingviews) - Governments are increasingly getting into green bonds. Nearly 40 sovereigns as well as other local public entities have issued green bonds in recent years. And they are also issuing green debt at increasingly longer tenors: in August the Monetary Authority of Singapore raised $2.4 billion via a 50-year green bond. Still, the boom in sovereign green bonds has not been accompanied by much progress towards net zero. The bonds’ proceeds will be earmarked for environmental investments, such as energy efficiency projects.

☆ China trials cross-border settlement involving cenbank digital currencies
▼ + stars: | 2022-09-29 | by ( ) www.reuters.com time to read: +2 min

REUTERS/Florence Lo/IllustrationSHANGHAI, Sept 29 (Reuters) - A central bank digital currency trial focused on cross-border transactions has been completed, the Bank for International Settlements (BIS) said, with Chinese state-owned banks participating as Beijing tries to internationalise its digital yuan. More than 160 cross-border payments and foreign exchange transactions totalling more than $22 million were made during the first trial involving four central bank currencies and real-value transactions, the BIS said in a statement. State media reported on Thursday that Industrial and Commercial Bank of China and Agricultural Bank of China were among the 20 participating commercial banks. China has been testing its digital currency in major cities, mainly for domestic retail payments, though the central bank has also vowed to explore cross-border payments in digital yuan. Russia, sanctioned by the West over its war in Ukraine, has announced plans to use its own digital currency to trade with China.

☆ Morning Bid: Plus fours
▼ + stars: | 2022-09-20 | by ( ) www.reuters.com time to read: +5 min

The last time Fed policy rates spent two years above 4% was 2005-2007, in the lead up to the banking crash of 2008. In what bond markets call "bear flattening", yields right out the maturity curve also rose, but by less than the 2-year. read moreAll will have Monday's advice from their umbrella grouping the Bank for International Settlements ringing in their ears. The Bank of Japan will likely hold the line on its easy policy again this week. read moreThe dollar's index was firmer on Tuesday going into the Fed meeting - less than 1% from this month's 20-year high.

☆ BIS backs "forceful" rate hikes despite rising recession risk
▼ + stars: | 2022-09-19 | by ( Marc Jones | ) www.reuters.com time to read: +3 min

The tower of the headquarters of the Bank for International Settlements (BIS) is seen in Basel, Switzerland March 18, 2021. REUTERS/Arnd WiegmannLONDON, Sept 19 (Reuters) - The world's central bank umbrella body, the Bank for International Settlements (BIS), has urged major economies to forge ahead with forceful interest rate hikes despite the growing threat of recessions and currency market volatility. The Switzerland-based BIS' quarterly report acknowledged that both recession and debt risks were rising, but said that bringing soaring global inflation back down remained paramount. "It is important to act in a timely and forceful way," the head of the BIS' Monetary and Economic Department, Claudio Borio, said. World currencies in 2022Register now for FREE unlimited access to Reuters.com RegisterReporting by Marc Jones; Editing by Kirsten DonovanOur Standards: The Thomson Reuters Trust Principles.

Search resuls for: "Bank for International Settlements"

16 mentions found