bank of canada
June 1, 2010 by Trend PK
Filed under World News
Loonie and markets down as Bank raises rates
OTTAWA—The Bank of Canada Tuesday became the first Group of Seven monetary authority to raise interest rates since the credit crisis, but said any further increases would have to be weighed carefully against domestic and global economic developments.
The bank raised its benchmark overnight rate by 0.25 percentage point to 0.50%. The rate had been at a record low 0.25% since April 2009.
The highly anticipated decision underscores the bank’s dilemma as it weighs a strong domestic economy against concerns about the impact of the euro-zone debt crisis on a global economic recovery that it acknowledged to be “increasingly uneven” across countries.
The bank said “considerable” monetary stimulus is still in place.
“Given the considerable uncertainty surrounding the outlook, any further reduction of monetary stimulus would have to be weighed carefully against domestic and global economic developments,” the bank said in its interest-rate statement.
The widely expected rate hike is the bank’s first since July 2007 and the first under the watch of Governor Mark Carney, who took over the top job in February 2008. The bank also re-established normal functioning of the overnight market, including reverting to a 0.50 percentage point operating band for the rate.
The debt crisis in Greece and some other euro zone countries has so far had only a limited impact on Canada through lower commodity prices. But the bank said some countries will now be forced to tighten their budgets quickly and that, combined with debt reduction by banks and households, could slow the pace of global growth.
Canadian government securities gained. The two-year note’s yield slumped 11 basis points, or 0.11 percentage point, to 1.71 percent. The price of the 1.5 percent security maturing in June 2012 advanced 21 cents to C$99.60.
Canada’s government bonds have made investors 3 percent this year, according to a Bank of America Merrill Lynch index.
More than half of the quarterly profit — a record $584 million — was generated by the Canadian banking operations, which saw growth in residential mortgages, lines of credit and business accounts.
Last week, the Bank of Montreal launched the earnings period with the strongest results, including a quarterly profit of $745-million that was 18 cents per share ahead of analyst estimates.
National Bank also beat predictions with a $261 million profit.
In the latest quarter, Royal Bank posted a $1.3-billion profit .
CIBC posted a $660 million profit that turned around a $51-million loss from a year earlier.
TD Bank more than doubled its second-quarter profit to nearly $1.2 billion.
russia european union
June 1, 2010 by Trend PK
Filed under World News
The 25th summit between Russia and the European Union (EU) concluded in the southern Russian city of Rostov-on-Don Tuesday.
At a joint press conference after the summit, Russian President Dmitry Medvedev, European Council President Herman van Rompuy and European Commission President Jose Manuel Barroso all hailed the two-day summit as fruitful, open and friendly.
A joint statement on the Partnership for Modernization, a bilateral agreement on the protection of classified information as well as a declaration condemning Israel’s attack on a Gaza-bond international aid flotilla one day ago have been issued during the summit.
Dmitry Medvedev has opened the Russia-EU summit in the southern Russian town of Rostov-on-Don. Within the three-hour meeting the sides are to discuss the economy, modernization and security.
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Opening the summit on Tuesday, the Russian president expressed hope that the event will become the beginning of the sides’ co-operation in the sphere of modernization.
EU ministers to draw up financial defense plan
May 9, 2010 by Trend PK
Filed under World News
BRUSSELS – The chair of a meeting of European Union finance ministers promised to do “whatever is necessary” to set up a rescue mechanism for the embattled euro and keep speculators at bay before markets open Monday.
Spanish Finance Minister Elena Salgado said Sunday the ministers would use an emergency meeting to work out plans to improve the stability of the euro after the currency was rocked over the past weeks by of the Greek financial meltdown.
“We are going to defend the euro,” said Salgado, who presided over the ministerial meeting. “We have to give more stability to our currency … We will do whatever is necessary” to reach agreement among the 27 ministers, she said.
So far, the finance ministers have been tightlipped what the measures will be.
They could involve balance of payment support that has already been available to some EU nations outside of the eurozone. There is also talk about specific loan guarantees, which countries like Britain could well oppose since it could be seen as a bailout fund.
The measures will have to be cleared and specific enough by the time markets open because vague promises have been unable to calm markets over the past weeks.
Underscoring the urgency, the European Commission is already working out the details of the deal.
“This is an important moment for both the Europeans and the others,” said French Finance Minister Christine Lagarde.
Financial markets have continued to sell off the euro and Greek bonds even as EU leaders have insisted for days that the Greek financial implosion is a unique combination of bad management, free spending and statistical cheating that doesn’t apply to other euro-zone nations.
Many economists think Greece will eventually default anyway, which could deal a sharp blow to the euro and lead to sharply higher borrowing costs for other indebted countries in Europe.
Default, or market contagion to other countries could lead to panic, intimidating consumers from spending and making banks fearful to lend money to businesses and consumers.
The vow to push budget shortfalls below the euro’s 3 percent limit echoes promises that have been regularly broken ever since governments in 1999 set a three-year deadline for achieving balanced budgets. The euro region’s overall deficit is forecast at 6.6 percent of gross domestic product in 2010 and 6.1 percent in 2011.
Plans for a European credit-rating authority are already under consideration at the European Commission, the bloc’s Brussels-based executive agency. It also is investigating whether ratings companies such as Standard & Poor’s wield too much power over investors’ perceptions of governments.
Asked whether steps to stem speculation against government bonds would include restrictions on short sales or credit default swaps, European Commission President Jose Barroso said “some of the points you have mentioned will be contemplated.”
EU Leaders Want Details on China Emissions Plan
December 1, 2009 by Trend PK
Filed under World News
BEIJING: China should provide details on how it will implement its greenhouse gas limits and offer further proposals commensurate with its status as the world’s largest emitter, European leaders said Tuesday.
China promised Thursday to nearly halve the ratio of pollution to GDP over the next decade — a major voluntary step that came a day after President Barack Obama promised the U.S. would lay out plans at this month’s global warming conference in Copenhagen to substantially cut its own greenhouse gas emissions.
China’s plan does not commit it to an overall reduction in emissions, which will continue to increase, though at a slower rate.
Following a meeting with Chinese President Hu Jintao, Swedish Prime Minister Fredrik Reinfeldt said the Europeans wanted to analyze the figures and find out precisely what measures Beijing plans to put into place and “how it will differ from their business as usual pathway in regards to emissions.”
Reinfeldt, whose country holds the rotating EU presidency, credited China with pursuing renewable energy and nuclear power as a substitute for coal-burning plants that spew carbon.
However, China’s status as a major source of increase in global emissions means requires Beijing to do more, Reinfeldt said, citing a continuing rise in global temperatures.
Scientists believe a 2-degree Celsius (3.6-degree Fahrenheit) increase in global temperatures from pre-industrial levels would lead to destructively rising seas and climate shifts that would produce droughts, floods and other severe disruptions.
The announcements by Beijing and Washington add significant weight toward achieving a global agreement, though the Dec. 7-18 Copenhagen conference is unlikely to produce a binding deal as hoped.
Climate change was among the issues raised in sometimes contentious talks at Monday’s one-day summit between China and the 27-member European Union, China’s largest trading partner, with a market of more than 500 million people.
European Commission President Jose Manuel Barroso had earlier welcomed China’s emissions pledge and on Tuesday appeared to reference Beijing’s insistence that developed nations take the lead in reducing emissions.
“We only have one planet and there is a shared responsibility for the future, of course with different levels of contribution,” Barroso said.
EU Leaders Want Details on China Emissions Plan was first posted on December 1, 2009 at 3:38 pm.
