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☆ ECB's Schnabel defends smaller balance sheet as debate heats up
▼ + stars: | 2023-12-05 | by ( Balazs Koranyi | ) www.reuters.com time to read: +4 min

She said her "demand-driven" approach fitted the euro zone, whose 20 countries vary in economic strength and have separate banking systems. "A demand-driven system is well-suited for a heterogeneous currency union that may be prone to fragmentation," Schnabel said in an interview. "Such a system also likely limits the size of the central bank balance sheet." She conceded, however, that "it could make sense to have a mix of different tools", suggesting policymakers may be looking for a compromise in this complex yet crucial debate for the euro zone financial system. Loans to banks or a structural bond portfolio would come on top of this.

Persons: Isabel Schnabel, Ralph Orlowski, Schnabel, Philip Lane, Schnabel's counterargument, Francesco Canepa, Catherine Evans Organizations: Frankfurt, Banking Congress, Old Opera, REUTERS, European Central Bank, ECB, Reuters, Federal Reserve, Bank of England, Thomson Locations: Frankfurt, Germany, FRANKFURT

☆ 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

☆ Euro zone inflation tumble pits ECB against markets
▼ + stars: | 2023-11-30 | by ( Balazs Koranyi | ) www.reuters.com time to read: +5 min

Inflation has dropped quickly towards the ECB's 2% target from levels above 10% just a year ago but policymakers have cautioned against excessive optimism. The rapid inflation slowdown puts the euro zone central bank and investors on a collision course as the two appear to see greatly different paths ahead, both for consumer prices and ECB interest rates. "And if the recent trends in inflation and growth continue then 2024 will be the year when the ECB implements a pirouette in monetary policy." "The market is therefore right to start looking at rate cuts for 2024. Some economists argue that modelling current inflation is exceptionally difficult because corporate profits are the main driver, not wages as in normal bouts of rapid inflation.

Persons: Sarah Meyssonnier, Kamil Kovar, Yannis Stournaras, Fabio Panetta, Panetta, Christine Lagarde's, Bert Colijn, Balazs Koranyi, Catherine Evans Organizations: REUTERS, ECB, Moody's, Bank of Italy, ING, Thomson Locations: Paris, France, FRANKFURT

☆ ECB should not set policy based on profit concerns: de Guindos
▼ + stars: | 2023-11-29 | by ( ) www.reuters.com time to read: +1 min

European Central Bank (ECB) Vice-President Luis de Guindos arrives at the Presidential Palace for a meeting with Cyprus President Nikos Christodoulides in Nicosia, Cyprus, October 4, 2023. REUTERS/Yiannis Kourtoglou/File Photo Acquire Licensing RightsFRANKFURT, Nov 29 (Reuters) - The European Central Bank should not set policy based on consideration about its own profitability or the profits earned by banks, ECB Vice President Luis de Guindos said in a newspaper interview, weighing in on a disagreement between policymakers. Some ECB governors are keen to increase unremunerated minimum reserve requirements for lenders in part to lower the losses the central bank is set to make on having to pay record high rates on excess liquidity. "I understand that remuneration of reserves is important for some banks, but monetary policy shouldn’t be driven by the financial position of banks or the profits of the central banks," de Guindos told Belgian newspapers De Standaard and La Libre Belgique in an interview. Reporting by Balazs Koranyi; Editing by Andrew HeavensOur Standards: The Thomson Reuters Trust Principles.

Persons: Luis de Guindos, Nikos Christodoulides, Yiannis, de Guindos, Balazs Koranyi, Andrew Heavens Organizations: European Central Bank, Cyprus, REUTERS, Rights, ECB, La Libre Belgique, Thomson Locations: Nicosia, Cyprus, Belgian, La

☆ AI threatens wages, not jobs - so far, ECB paper finds
▼ + stars: | 2023-11-28 | by ( ) www.reuters.com time to read: +1 min

AI (Artificial Intelligence) letters are placed on computer motherboard in this illustration taken, June 23, 2023. REUTERS/Dado Ruvic/Illustration//File Photo Acquire Licensing RightsFRANKFURT, Nov 28 (Reuters) - The rapid adoption of artificial intelligence could reduce wages, but so far is creating, not destroying jobs, especially for the young and highly-skilled, research published by the European Central Bank showed on Tuesday. Firms have invested heavily in artificial intelligence, or AI, leaving economists striving to understand the impact on the labour market and driving fears among the wider public for the future of their jobs. Most of their impact on employment and wages – and therefore on growth and equality – has yet to be seen." The findings were in contrast to previous "technology waves," it said, when computerisation decreased "the relative share of employment of medium-skilled workers, resulting in "polarisation".

Persons: Dado Ruvic, –, Balazs Koranyi, Barbara Lewis Organizations: REUTERS, Rights, European Central Bank, ECB, Thomson

☆ ECB could take bigger role in supervising shadow banks, Enria says
▼ + stars: | 2023-11-28 | by ( ) www.reuters.com time to read: +2 min

European Union (EU) flags fly in front of the headquarters of the European Central Bank (ECB) in Frankfurt, Germany, July 8, 2020. REUTERS/Ralph Orlowski/File Photo Acquire Licensing RightsFRANKFURT, Nov 28 (Reuters) - The European Central Bank may need to take on a bigger role in supervising shadow banks as they are now bigger than conventional lenders and may be sitting on elevated risk, the outgoing head of the ECB's supervision arm told European newspapers. "These are different animals to banks, so we shouldn’t expect to supervise them in the same way as we supervise banks." Taking on oversight of shadow banks would require legislative changes, a time consuming process even under the best of circumstances, and requiring broad political agreement. But some have argued that such a change could ease liquidity stress, particularly if shadow banks gained access to the ECB lending operations.

Persons: Ralph Orlowski, Andrea Enria, Expansión, Enria, Balazs Koranyi, Tomasz Janowski Organizations: Union, European Central Bank, REUTERS, Rights, prudential, ECB, Thomson Locations: Frankfurt, Germany

☆ ECB chief Lagarde admits her son lost crypto cash
▼ + stars: | 2023-11-24 | by ( ) www.reuters.com time to read: +2 min

European Central Bank President Christine Lagarde addresses the European Parliament's Committee on Economic and Monetary Affairs, at the European Parliament, in Brussels, Belgium March 20, 2023. REUTERS/Johanna Geron//File Photo Acquire Licensing RightsFRANKFURT, Nov 24 (Reuters) - No one is a prophet in their own land, including European Central Bank President Christine Lagarde, who admitted on Friday that her son lost "almost all" of his investments in crypto assets, despite copious warnings. Lagarde has long railed against cryptocurrencies, calling them speculative, worthless and a tool often used by criminals for illicit activity. "It wasn't a lot but he lost it all, he lost about 60% of it," Lagarde added. The ECB chief has two sons in their mid-30s but did not say which one she was referring to.

Persons: Christine Lagarde, Johanna Geron, Lagarde, cryptocurrencies, Balazs Koranyi, Susan Fenton Organizations: European Central Bank, Parliament's, Economic, Monetary Affairs, REUTERS, Rights, ECB, Thomson Locations: Brussels, Belgium, Frankfurt

☆ Germany financial sector facing dark clouds, Bundesbank warns
▼ + stars: | 2023-11-23 | by ( ) www.reuters.com time to read: +2 min

REUTERS/Kai Pfaffenbach/File Photo Acquire Licensing RightsCompanies Deutsche Bundesbank FollowFRANKFURT, Nov 23 (Reuters) - Germany's financial firms may be well capitalised now but face challenges ranging from rising interest expenditure and weak loan demand to unrealised losses, Bundesbank Vice President Claudia Buch said on Wednesday. "Almost two-thirds of savings banks and credit cooperatives now have unrealised losses throughout their banking book, which comprises loans as well as securities," Buch said in a statement. Buch warned that interest rate expenditure was likely to rise in the future, which will compress margins and weigh on earnings. Banks will struggle to offset higher costs via rising loan volumes since corporate demand is weak amid a recessionary environment. "Even in adverse scenarios, financial institutions should have sufficient levels of capital and liquidity to be able to absorb shocks on their own," Buch added.

Persons: Kai Pfaffenbach, Claudia Buch, Buch, Banks, Balazs Koranyi, Bernadette Baum Organizations: REUTERS, Thomson Locations: Frankfurt, Germany, FRANKFURT

☆ ECB says property slump could last years in threat to lenders
▼ + stars: | 2023-11-21 | by ( ) www.reuters.com time to read: +4 min

An ECB report which examines threats to financial stability underscored heightened concern over a property boom that is now unravelling in countries such as Germany and Sweden. Commercial property prices have been hit by economic weakness and high interest rates over the last year, challenging the sector's profitability and business model, the ECB said. The sector is not big enough to create a systemic risk for lenders, but could increase shocks across the financial system and greatly impact the financial firms, from investment funds to insurance firms, collectively known as shadow banks. The ECB issued its report as deep cracks emerged in the property market of the euro zone's top economy, Germany. Commercial real estate transactions were down 47% in the first half of 2023, compared with the same period in 2022.

Persons: René Benko, Banks, Balazs Koranyi, John O'Donnell, Barbara Lewis, Alexander Smith Organizations: European Central Bank, ECB, Signa, Chrysler, Signa Group, Reuters, Raiffeisen Bank, Bank, Thomson Locations: FRANKFURT, Germany, Sweden, Austrian, Hamburg, Austria, Bank Austria

Speaking on CNBC, Boston Fed President Susan Collins also said the U.S. central bank must be "patient and resolute, and I wouldn't take additional firming off the table." Inflation by the Fed's preferred measure was 3.4% in September, down from its 7.1% peak last summer, but above the central bank's target. And he expressed increased confidence that the Fed can meet its inflation goal without the kind of rise in unemployment seen in the U.S. central bank's prior battles with inflation. Speaking on Thursday, Cleveland Fed President Loretta Mester, one of the central bank's more hawkish policymakers, said she had not yet assessed whether she would continue to pencil in a further rate hike. Fresh economic and interest rate projections are due to be the released at the Dec. 12-13 policy meeting.

Persons: Mary Daly, Daly, Susan Collins, Collins, Austan Goolsbee, Loretta Mester, Ann Saphir, Michael S, Pete Schroeder, Dan Burns, Balazs Koranyi, Paul Simao Organizations: Federal, San Francisco Fed, CNBC, Boston, Deutsche Bank, Chicago Fed, Fed, Cleveland Fed, Derby, Thomson Locations: Frankfurt, Germany, U.S

☆ ECB hawks push back on early rate cut bets
▼ + stars: | 2023-11-17 | by ( ) www.reuters.com time to read: +3 min

"It would be unwise to start cutting interest rates too soon," Bundesbank President Joachim Nagel said in a speech. Austria's Robert Holzmann was even more explicit, arguing that the second quarter was simply too soon for a rate cut. Asked if he ruled out an interest rate cut in the second quarter of next year, he said: "That would be a bit early." The ECB held rates unchanged in October, snapping a streak to ten straight rate hikes, fuelling market bets that its record-breaking tightening streak is now over and the next move is a cut. Instead of easing policy, the ECB should tighten further, Wunsch argued, by ending early its bond purchases in the 1.7 trillion euro Pandemic Emergency Purchase Programme.

Persons: Joachim Nagel, Ann Saphir, Robert Holzmann, Holzmann, Pierre Wunsch, Wunsch, Nagel, Balazs Koranyi, Francois Murphy, Kirsten Donovan, Andrew Heavens Organizations: European Central Bank policymaker, Kansas City Fed, REUTERS, European Central Bank, ECB, Thomson Locations: Jackson, Jackson Hole , Wyoming, FRANKFURT, VIENNA, Belgian

☆ Global watchdog FSB to tackle funds' liquidity mismatch - Knot
▼ + stars: | 2023-11-16 | by ( ) www.reuters.com time to read: +1 min

Financial Stability Board (FSB) Chair Klaas Knot arrives for the G20 Leaders' Summit in Bali, Indonesia, November 15, 2022. Mast Irham/Pool via REUTERS Acquire Licensing RightsFRANKFURT, Nov 16 (Reuters) - The Financial Stability Board, a global risk watchdog, plans to issue new liquidity recommendations for some investments funds after bouts of stress in recent years risked spreading over to the broader financial sector, the head of the FSB said on Thursday. "Looking ahead, we will soon issue policy recommendations to address liquidity mismatches in open ended funds," Klaas Knot, the head of the FSB and the governor of the Dutch central bank said in a speech on Thursday. Open-ended investment funds tend to sit on long term assets but their investors often have the option for short-term redemptions, creating a liquidity mismatch in periods of high stress. FSB recommendations are not binding but serve as vital guidelines for local regulators and supervisors setting ground rules.

Persons: Klaas Knot, Mast, Klaas, Balazs Koranyi, Francesco Canepa Organizations: REUTERS Acquire, Rights, Thomson Locations: Bali , Indonesia, Dutch

☆ ECB backs global rules for bonds wiped out in Credit Suisse rescue
▼ + stars: | 2023-11-16 | by ( ) www.reuters.com time to read: +2 min

A view shows the logo of the European Central Bank (ECB) outside its headquarters in Frankfurt, Germany March 16, 2023. REUTERS/Heiko Becker//File Photo Acquire Licensing RightsFRANKFURT, Nov 16 (Reuters) - The European Central Bank's chief supervisor on Thursday supported creating global standards for convertible bonds that were wiped out as part of Credit Suisse's rescue by rival UBS (UBSG.S) earlier this year. The Basel Committee said in a report last month it would review the features of AT1 bonds, including the "loss-absorbing hierarchy". But Credit Suisse's bonds contained a clause allowing authorities the write down those bonds without winding down the bank. This clause is not a feature in bonds issued by European Union banks and the ECB has made clear that it would impose losses on shareholders first.

Persons: Heiko Becker, Andrea Enria, Enria, Pablo Hernández de Cos, Francesco Canepa, Balazs Koranyi, Toby Chopra Organizations: European Central Bank, REUTERS, Rights, Central Bank's, UBS, ECB, Banking Supervision, Basel, Committee, European Union, Thomson Locations: Frankfurt, Germany, Swiss, Basel

☆ Europe's problems are far bigger than a shallow recession
▼ + stars: | 2023-11-14 | by ( Balazs Koranyi | ) www.reuters.com time to read: +5 min

Deep structural problems mean Europe is bound to trail most other big economic areas for years to come. The labour market remains tight and the world economy is rebounding, so external demand is also likely to be healthier. Fearing it will be difficult to hire in future, firms are now hanging onto workers, creating even more labour market tightness, potentially fuelling wage growth and weakening productivity. The potential growth rate for Europe's largest economy is now below 1%. European Union governments are meanwhile struggling to reach consensus on bigger questions that will help shape the future.

Persons: Philip Lane, Erik Nielsen, Eric Gaillard, Europe's, There's, Lane, Reinhard Cluse, Mark John, Catherine Evans Organizations: Central Bank's, REUTERS, European Commission, UBS, European Union, Thomson Locations: FRANKFURT, Europe, Nice, France, United States, Germany

☆ Euro zone should not ease bank buffers, ECB says
▼ + stars: | 2023-11-13 | by ( ) www.reuters.com time to read: +2 min

European Central Bank (ECB) Vice-President Luis de Guindos arrives at the Presidential Palace for a meeting with Cyprus President Nikos Christodoulides in Nicosia, Cyprus, October 4, 2023. REUTERS/Yiannis Kourtoglou/File Photo Acquire Licensing RightsFRANKFURT, Nov 13 (Reuters) - Euro zone economic growth will remain weak in the near term as services and the labour market weaken but nations in the bloc should not free discretionary bank buffers to ease the pain, European Central Bank Vice President Luis de Guindos said. A potential concern is that the euro zone economy has been broadly stagnating all year and any recovery next year will be shallow, keeping growth below 1%. "It is likely that the euro area economy will remain subdued in the near term." On the prospects for interest rates, de Guindos said the ECB would have more information in December "to reassess the inflation outlook and required policy action".

Persons: Luis de Guindos, Nikos Christodoulides, Yiannis, de Guindos, Guindos, Balazs Koranyi, Francesco Canepa, Emelia Sithole Organizations: European Central Bank, Cyprus, REUTERS, Rights, ECB, Thomson Locations: Nicosia, Cyprus, Germany, France, Netherlands

☆ Centeno says outgoing Portugal PM only invited him to ponder on premiership
▼ + stars: | 2023-11-13 | by ( Sergio Goncalves | ) www.reuters.com time to read: +2 min

LISBON, Nov 13 (Reuters) - Bank of Portugal Governor Mario Centeno, who is under fire from the opposition over an invitation by the outgoing prime minister to replace him as premier, said on Monday he never accepted the offer but was just asked to ponder on the matter. Portuguese opposition parties on Friday argued that such an invitation compromised the political independence of a central bank governor. The Bank of Portugal's ethics committee is expected to meet on Monday to evaluate his conduct. Prime Minister Antonio Costa stepped down on Tuesday over an investigation into alleged illegalities in his government's handling of lithium and hydrogen projects and a large-scale data centre. Centeno announced his departure from the finance ministry in June 2020, during Costa's second term, and was nominated to head the bank a month later.

Persons: Mario Centeno, Antonio Costa, illegalities, Costa, Marcelo Rebelo de Sousa, Centeno, Rebelo de Sousa, Olli Rehn, Balazs Koranyi, Francesco Canepa, Andrei Khalip, Bernadette Baum Organizations: Bank of Portugal, Socialist, European Central Bank policymaker, Bank of, ECB, Thomson Locations: LISBON, Portuguese, Bank of Portugal, ECB's, Finland, Frankfurt

☆ Euro zone inflation could tick up in coming months: Lagarde
▼ + stars: | 2023-11-10 | by ( ) www.reuters.com time to read: +2 min

FRANKFURT, Nov 10 (Reuters) - Euro zone inflation could tick up in the coming months but European Central Bank interest rates held at their current level at least for several quarters could still get price growth back to 2%, ECB President Christine Lagarde said on Friday. "There will be a resurgence of probably higher numbers going forwards and we should be expecting that," Lagarde told a Financial Times event. Still, Lagarde hinted that even if inflation picks up, another rate hike may not be needed. When asked what long enough means, Lagarde said no change should be expected in the "next couple of quarters". Reporting by Balazs Koranyi; editing by Christina Fincher, Tomasz Janowski and David EvansOur Standards: The Thomson Reuters Trust Principles.

Persons: Christine Lagarde, Lagarde, Francois Villeroy de Galhau, Philip Lane, Balazs Koranyi, Christina Fincher, Tomasz Janowski, David Evans Organizations: Central Bank, ECB, Financial, European Union, Thomson Locations: FRANKFURT, French

☆ ECB must keep rates at or near 4% through 2024 to get inflation down -IMF
▼ + stars: | 2023-11-08 | by ( ) www.reuters.com time to read: +3 min

"Monetary policy is appropriately tight and needs to remain so in 2024," Kammer told a news conference. "For all intents and purposes, (the deposit rate) should be held at that level or close to that level throughout 2024." Kammer warned the ECB against cutting rates too soon because that would require even more costly policy tightening later on. While the IMF sees price growth back at target in 2025, an exceptionally tight labour market could push this date back to 2026, it warned. Real wages also have some way to go catch up with inflation and this could also keep up the price pressure, the IMF said.

Persons: Ralph Orlowski, Alfred Kammer, Kammer, Balazs Koranyi, Mark Potter Organizations: European Union, European Central Bank, REUTERS, Rights, International Monetary Fund, ECB, IMF's European Department, IMF, Thomson Locations: Frankfurt, Germany, Gaza

☆ Multinationals plan moves to minimise China risk, ECB survey shows
▼ + stars: | 2023-11-06 | by ( ) www.reuters.com time to read: +2 min

A view shows the logo of the European Central Bank (ECB) outside its headquarters in Frankfurt, Germany March 16, 2023. Seeking on-the-ground confirmation, the ECB surveyed 65 very large firms with a global footprint and 49% said they were looking to "near-shore", or bring production closer to the point of sales. "As to those countries which posed – or could pose – a risk to supply chains in their sector more generally, two-thirds of all respondents cited China," the ECB said in an Economic Bulletin article. "A large majority of these identified China as that country, or one of those countries, with all of them considering this an elevated risk," the ECB added. The moves could also fuel inflation as close to half of firms said they expected the changes to result in higher prices, the paper added.

Persons: Heiko Becker, Balazs Koranyi, Andrew Heavens Organizations: European Central Bank, REUTERS, Rights, ECB, European, Thomson Locations: Frankfurt, Germany, China, Ukraine

European flags are seen in front of the European Central Bank (ECB) building, in Frankfurt, Germany, July 21, 2022. Price pressures are easing and the economy is slowing to a point that a recession may already be underway, making any further rate hikes increasingly unlikely. Meeting in Athens for the first time in over a decade, the Governing Council is expected to have an easy time deciding on rates. Others argue that growth prospects are deteriorating so quickly that the ECB would be better served with a "neutral" guidance, emphasizing data dependency. This suggests that any change in the scheme will be gradual, so the ECB can protect Italy as long as possible.

Persons: Wolfgang Rattay, Martin Wolburg, Wolburg, Frederik Ducrozet, reinvestments, Balazs Koranyi, Emelia Sithole Organizations: European Central Bank, REUTERS, ECB, Generali Investments, Wealth Management, Thomson Locations: Frankfurt, Germany, FRANKFURT, Athens, Italy

☆ Weak euro zone lending adds to recession fears
▼ + stars: | 2023-10-25 | by ( ) www.reuters.com time to read: +2 min

A view shows the logo of the European Central Bank (ECB) outside its headquarters in Frankfurt, Germany March 16, 2023. REUTERS/Heiko Becker/File Photo Acquire Licensing RightsFRANKFURT, Oct 25 (Reuters) - Bank lending across the euro zone came to a near standstill last month, European Central Bank data showed on Wednesday, providing further evidence that the 20-nation bloc was skirting a recession. Still, detailed data suggest that underlying trends may be more nuanced as the monthly flow of fresh loans was a positive 14.0 billion euros, reversing much of the previous month's negative 19.9 billion euro reading. Lending is taking a hit after a string of interest rate hikes took the ECB's key rate to a record high 4% last month, all in the hope this would depress activity enough for inflation to return to 2%. Lending to households meanwhile rose by just 0.8% after a 1.0% increase in August with the monthly flow of loans at a positive 4.5 billion euros, ECB data showed.

Persons: Heiko Becker, Balazs Koranyi, Francesco Canepa Organizations: European Central Bank, REUTERS, Rights, Bank, PMI, Thomson Locations: Frankfurt, Germany

☆ Analysis: Middle East throws central banks yet more unknowns
▼ + stars: | 2023-10-20 | by ( Mark John | ) www.reuters.com time to read: +5 min

Now, to complicate matters for a professional caste which prides itself on being data-driven, the Middle East is throwing a new set of real but unquantifiable risks into their equations. Unless the picture changes dramatically in coming days, the European Central Bank, U.S. Federal Reserve, Bank of England and Bank of Japan are already expected to keep their policy rates on hold in meetings over the next two weeks. ECB rate-setter Yannis Stournaras, the governor of the Greek central bank, argued that Europe had broadly managed to absorb the effects of rising energy costs triggered by the Ukraine war and hoped it could do the same if further shocks emerged. For now, the conflict remains largely confined to Israel and Gaza, something S&P Global Market Intelligence said in a study this week was already "muddying the waters" for central banks. As the Fed's Powell put it: "Our institutional role at the Federal Reserve is to monitor these developments for their economic implications, which remain highly uncertain".

Persons: Jerome Powell, David Westin, Brendan McDermid, Powell, Huw Pill, Yannis Stournaras, Tetsuya Hiroshima, Fed's Powell, Dan Burns, Balazs Koranyi, Francesco Canepa, Maria Martinez, Leika, Kevin Yao, David Milliken, Tomasz Janowski Organizations: Federal, Anchor, Bloomberg, Street, Economic, of New, REUTERS, Bank of England, International Monetary Fund, European Central Bank, U.S, Federal Reserve, Bank of Japan, Fed, ECB, Reuters Graphics, Reuters, Tokai, Toyota Motor Corp, P Global Market Intelligence, Thomson Locations: of New York, New York City, U.S, Israel, Ukraine, Iran, Hormuz, Europe, United States, Japan, Gaza, Washington, Frankfurt, Berlin, Tokyo, Beijing, London

☆ Key takeaways from the IMF/World Bank meetings
▼ + stars: | 2023-10-14 | by ( ) www.reuters.com time to read: +5 min

Global inflation is seen dropping from 6.9% this year to a still-high 5.8% next. Italian central bank governor Ignazio Visco said there was an impression markets were "reevaluating the term premium" as investors become more nervous about holding longer term debt. One debt restructuring deal emerged: Zambia finally agreed a debt rework memorandum of understanding with creditors including China and France. Sri Lanka said on Thursday it reached an agreement with the Export-Import Bank of China covering about $4.2 billion of debt, while talks with other official creditors are stalling. There was much talk ahead of Marrakech on revamping the IMF and World Bank to better reflect the emergence of economies like China and Brazil.

Persons: Ajay Banga, Mercy Tembon, Finance Serhiy Marchenko, Ceda Ogada, Kristalina Georgieva, Pierre, Olivier Gourinchas, Ignazio Visco, Joyce Chang, Vitor Gaspar, Mehmet Simsek, Murat Ulgen, Kate Donald, Ahmed El Jechtimi, Andrea Shalal, David Lawder, Leika Kihara, Elisa Martinuzzi, Rachel Savage, Jorgelina, Rosario, Balazs Koranyi, Mark John, Christina Fincher Organizations: Bank, Finance, International Monetary Fund, Emerging, Research, HSBC, Reuters, Export, Import Bank of, World Bank, Oxfam International's Washington DC Office, Thomson Locations: Ukraine, MARRAKECH, Morocco, Moroccan, Marrakech, Israel, Central, United States, China, Italy, Italian, Turkey, Kenya, Zambia, France, Sri Lanka, Import Bank of China, Brazil, U.S

☆ BoE's Bailey says he's puzzled by stubborn pay growth in UK
▼ + stars: | 2023-10-14 | by ( ) www.reuters.com time to read: +1 min

People walk outside the Bank of England in the City of London financial district in London, Britain May 11, 2023. REUTERS/Henry Nicholls/File photo Acquire Licensing RightsMARRAKECH, Morocco, Oct 14 (Reuters) - Bank of England Governor Andrew Bailey said on Saturday he was puzzled by the continued strength of pay growth in Britain which, unlike other areas of the economy, has not yet responded to the BoE's run of 14 back-to-back interest rate hikes. The increases in borrowing costs were having an impact on employment numbers and in the housing market, Bailey told a panel discussion on the sidelines of International Monetary Fund meetings in Morocco. "I should say what is more puzzling and in a sense we wait to see is the situation on pay and earnings where... the usual transmission mechanism is not yet being demonstrated," he said during the event organised by the Group of 30 consultative body. Reporting by Balazs Koranyi Writing by William SchombergOur Standards: The Thomson Reuters Trust Principles.

Persons: Henry Nicholls, Andrew Bailey, Bailey, Balazs Koranyi, William Schomberg Organizations: Bank of England, REUTERS, Rights, International Monetary Fund, Group, Thomson Locations: City, London, Britain, Rights MARRAKECH, Morocco

☆ Euro zone labour market shows no sign of weakening: Lagarde
▼ + stars: | 2023-10-14 | by ( ) www.reuters.com time to read: 1 min

MARRAKECH, Oct 14 (Reuters) - The euro zone labour market shows no sign of softening, despite a near recessionary environment and a record string of interest rate hikes, European Central Bank (ECB) President Christine Lagarde said on Saturday. "The labor market still shows no real sign of weakening," Lagarde told a conference. "The numbers we see both in terms of actual participation in the unemployment and unemployment in nominal numbers are quite striking." The ECB has been raising rates to dampen demand and persistently low unemployment is a key reason why some policymakers worry that high inflation could get stuck above target as workers enjoy the some of the best wage growth in years. Reporting by Balazs Koranyi Editing by Mark PotterOur Standards: The Thomson Reuters Trust Principles.

Persons: Christine Lagarde, Lagarde, Balazs Koranyi, Mark Potter Organizations: Central Bank, ECB, Thomson Locations: MARRAKECH

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