The Central Bank of China has ordered banks in the country to raise the level of reserves as new rules come into force from today forward CNBC, citing unnamed sources. Thus in practice has entered into force the decision to increased requirements to the level of reserves for which the information leaked last week. The new provision requires that the level of reserves to increase by 0,5 percentage points. Information that currently is not official, says that the requirements imposed on certain financial institutions, which officials say have a risky behavior. Last week Reuters reported that similar requirements are imposed on CITIC Bank, which is the seventh largest bank in the country and the largest lender Industrial and Commercial Bank of China.
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The trade in the securities markets in the Asian and Pacific region stood at negative territory for the second straight day today as the main reason for this became auctions in banking and technology sectors. China made an exception because of the good performance of the companies in the construction and housing sector after the impressive data on the real estate market in 2009. The regional index MSCI Asia Pacific, which brings together ten companies stock Asian countries plus Australia and New Zealand, yielded a 0.4 percent to 125.73 points. Rising metals supported extractive companies, but they failed to compensate for the decrease in the index. Technology companies were the losers, followed by banks and insurance companies. Shares of Japanese exporters of cars and consumer electronics fell the exchange in Tokyo after the yen rose against the dollar. Government data showed that consumer confidence in Japan accounted for a sharp decline in December, which kicks off a difficult period for the economy. The index of blue chip Nikkei 225 fell 0.8 percent to end the session at 10 764.90 points. With minimal decline for the main Kospi index 0.1 percent from 1 710 points to end the trade in South Korea. Shares of the largest steel maker Posco in the country rose by 1% to 604 thousand won of South Korea in Seoul stock exchange after news that billionaire Warren Buffett, who is chairman of investment company Berkshire Hathaway, wants to increase its stake in the company.
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The European stocks started the week with a fall, as Pan-European index Dow Jones Stoxx 600 lost 0,5 per cent to 247.88 points. National Bank of Greece SA – the largest Greek bank, slid 5.6 percent during trade in Athens. Prime Minister George Papandreou will have to convince investors that it can cope with the worst fiscal crisis in the country for 15 years. The government will submit to the new EU plan to tackle the deficit in January. Greece is facing a “very difficult” situation and should take “bold” decision to fix its budget deficit, said today the President of the European Central Bank Jean-Claude Trichet. By Standard and Poor’s today identified a “negative” outlook to the country’s credit rating, which means that it can be reduced to two months. Second largest bank in the country – EFG Eurobank Ergasias SA, lost 6 percent today, and Piraeus Bank SA – 4 per cent. Shares of Royal Bank of Scotland lost 4.7 percent and those of Lloyds – 4,1 per cent after British finance minister Alistair Darling refused to repeal the tax on very high bonuses. Shares of Siemens AG retreated by 1,6 percent as Morgan Stanley cut its recommendation on them.
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The Venezuelan President Hugo Chavez announced on Wednesday that his government may intervene in the management of more private banks, shocking investors only two days after authorities closed four banks, officials said. His statement led to the largest decline in government bonds than three months, the local currency fell heavily Bolivar on the black market. On Monday, four banks were closed, owned by businessman Ricardo Fernandez. It brought hundreds of worried owners of deposits in the streets and triggered speculation that more banks may be closed or acquired by the state. Recalling the events of the financial crisis in 1994 which swept half of the banks in the country, opposition television stations, given the histories of worried depositors, despite assurances from the government that will protect deposits in closed banks. “Our radar is aimed at another group of banks,” said Chavez in his speech on Wednesday without giving further details. “Be assured that if we had to intervene in all private banks in Venezuela, I’ll do it,” reassured “the president.
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The management of two of the largest financial groups in the U.S. – Citigroup and Bank of America, has received an average salary of 18 million dollars per person in 2008 This happens within the same year, when both are threatened by bankruptcy banks received 90 billion dollars financial assistance from the state. For example, Citigroup has paid 390.2 million dollars for 21 people from top management, and Bank of America for an amount estimated at 227.8 million dollars, divided between 13 executives. The amount per person in the first case amounts to 18.6 million dollars, while the second – for 17,5 million dollars, police Bloomberg. The average salary for managers of both banks is double that of the other five rescued by the state financial institutions. Faynbarg Kenneth, who was charged with the task of government to ensure that bonuses and pension packages at high-paid 100 managers of troubled companies instruct their salaries for 2009 to be shortened by an average of 50%.
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The indexes of the Old Continent ended with reductions this week for the last session on Thursday after pan-European index Dow Jones Stoxx 600 rose to its highest level in 12 months. Reason for this became worse-than-expected quarterly results at Sony Ericsson, General Electric and Bank of America. Financial companies in the composition of the Dow Jones Stoxx 600 contributed most to today’s drop the index. Dow Jones Stoxx 600, which monitors the securities markets in 18 western states, slid 0.7 percent to 245.58 points. Thus limit its stock measure ahead of the start of the week to 1.2 percent. With the sharp drop today distinguish the Exchange in Athens. The main Greek ASE index decreased by 2.2 percent to 2830 points after news that the Treasury may impose a single tax profits of banks and other companies. Thus the government hopes to reduce the large budget deficit of the country. Shares of National Bank of Greece, which is the largest credit institution in Greece, fell by 3.6 percent to 26.80 euros per share after the news. In Britain’s FTSE 100 was down by 0.6 percent to 5190 points, but the record weekly rise of 0.6 percent. Top losers were financial and extractive companies because of disappointing results at Bank of America and cheaper metals.
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The Executive Director of Bank of America Kenneth Lewis announced his retirement from office on 31 December. The Bank, one of the most affected by the financial crisis after a controversial effects buy Merrill Lynch, supported by the Federal Reserve has not yet found a successor to Lewis. Earlier this year, was forced to retire from post at board chairmen of directors of the bank has notified its decision to other leaders. The Executive Director of Bank of America believes that it is strong enough to cope with the challenges ahead in the market. The loss of positions for Lewis came after he realized that he had approved the purchase of the assets of Merrill Lynch without informing investors about the bank’s huge losses.
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