Business News » European Central Bank

Trichet forecasts a slight rise in inflation

viliyana89 — Thu, 08 Oct 2009 10:26:33 +0000

The President of the European Central Bank, Trichet told a news conference after the meeting of the institution that current levels of base rate are appropriate and recent economic data confirms this. At the meeting it was decided to maintain the rate of 1 percent, supported unanimously, he added. According to him, it was noted that good signals for economic stabilization and expects inflation to moderate in positive levels, and inflation stability will be maintained to support the private costs. Trichet said the moderate growth of loans maintain low inflation. In August the annual inflation rate was minus 0.2%. Economic recovery, although expected to be “uneven”, said President of the ECB. He warned that the risk to see if further recovery of tightening fiscal policy. Departure from current policies of fiscal stimulus must be made at a time when the recovery remain
Once again, Trichet said that it is extremely important support of the United States in order to strengthen the position of the dollar. Asked about the possible passage of the discussion of commodity prices (like oil) in euro, Trichet said: “There is no strategy or campaign to promote the use of the euro internationally.

Barroso: Europe is coming up in 2010

viliyana89 — Wed, 26 Aug 2009 10:15:59 +0000

On a business forum in Barcelona, European Commission President Jose Manuel Barroso predicted that the world will be the same after pass this economic crisis. Barroso said that Europe will start to come out of the crisis in 2010 He said the continent should be made much effort to overcome the serious situation. Barroso for most of Europe’s main concern is unemployment. This is the main drama of European society. Barroso added that the European Union will show flexibility in terms of limit of 3 percent of GDP, which must not pass the budget deficits of member states of the Union.
Really all of the indexes are showing that Europe is quite close for running away from the crisis.

Great Britain with high decrease of economy

viliyana89 — Fri, 24 Jul 2009 14:48:14 +0000

The UK economy has decreased by 5.6 percent in the second quarter of this year compared with the same period of 2008, forward Bloomberg, referring to the statistical office in the country. This is the strongest decline in 1955 when it started keeping official statistics. On a quarterly basis is reduced by 0.8% due to the decline in construction, lending and business services. It is recalled that economists expected the country’s GDP to decrease by 0.3 percent. Expectations of the International Monetary Fund is that the country will register economic slowdown from 4.2 percent at the end of this year. According to Andrew Sentans, Bank of England by the British economy will start to life in the second half of 2009
After disclosure of data losses the GBP with 0.5 percent against the dollar course and fell to 1.6466 USD / GBP

Eight largest U.S. banks are on profit

viliyana89 — Tue, 21 Jul 2009 15:16:10 +0000

The Eight major banks are already with profits in the U.S., which reported earnings in the second quarter of 2009 today to the group, which fell safe as Goldman Sachs and JP Morgan Chase joined Bank of America and Citigroup. The Bank of America reported profits of 3.2 billion dollars during April-June (or $ 0.33 per share) and revenues amounted to 33.1 billion dollars, which is 60 percent more. The results were better than expectations, according to which profits should be between 0.28 and 0.29 dollars per share. Last year in the second quarter was 0.72 dollars per share (or profit amounted to 3.41 billion dollars). The Net income of Bank of America for the period April-June increased by 9 percent to 11.9 billion dollars. Furthermore, the Bank announced that during the second quarter expanded loans to more than 211 billion dollars. Treasury announced that it added reserves (provisions) for credit losses amounted to 13.4 billion dollars. Citigroup results show a net profit of 3.1 billion dollars for the second quarter of 2009, or earnings of 0.49 dollars per share (compared to a loss of 0.55 dollars per share or net losses of 2.5 billion dollars in the second quarter of 2008 ). Bank earnings have amounted to 29.97 billions USD revenues to 17.54 billion dollars for the prior year.
The Data are better than expected – the forecast was for 0.31 dollars per share and revenues amounted to 21.136 billion dollars. Contribution to profit Citigrup is the sale of Morgan Stanley Smith Barney. From Citigroup announced that the challenges remain seriznite consumer loans such as loans for the second quarter have increased by 81 percent to 12.4 billion dollars.

The Eurozone consumer prices fall

viliyana89 — Thu, 16 Jul 2009 08:28:24 +0000

The Eurozone consumer prices decreased on an annual basis for the first time in June, which coincides with the prediction of the European Central Bank (ECB) says Finance.news, quoted by Eurostat. Core inflation has also declined by 0.1 percent in June after an earlier yearly inflation in 16 states, adopted the euro, was 4 percent. Time of ETSBK said it expected strong fluctuations in raw material prices last year would lead to a decline in inflation on a monthly basis for several months before it becomes positive again at the end of this year. Reiterated several times that the short-term movements in inflation should not be taken into account in monetary policy. The Economists are of the opinion that the fall in prices will lead to a prolonged period of deflation. Prices of fuel and transport decreased by 18.8% yearly base and for heating fuel fell by 39.3 percent.
The Eurostat data show that in June 2009 the highest annual deflation occurred in Ireland (-2.2%), followed Portugal (-1.6%) and Belgium, Spain and Luxembourg are (-1% ). Top Romania is inflation (5.9 percent), followed in descending order by Poland (4.2 percent) and Lithuania (3.9%). In Bulgaria, inflation for June on an annual basis amounts to 2.6%.

Loan euro in Eastern Europe create risks

viliyana89 — Thu, 09 Jul 2009 04:06:41 +0000

The Gold reserves of the European Central Bank, including claims in gold (physical gold, such as bars, coins, ingots, and storing pieces of monetary gold, as balances on accounts with gold) decreased by EUR8.5 billion to EUR232.128 billion during the week ended July 3, according to today’s report of the financial institution. The change primarily reflects the quarterly revaluation adjustments and reserves and selling gold to EUR5.0 million from a central bank in the euro area, indicating the report of the ECB. Foreign exchange reserves showed a net decrease of EUR10.5 billion to EUR206.2 billion for that period. ECB reported an increase of money in circulation in 16 EU member states of the euro by EUR6.6 billion to EUR768.7 billion.
The European Bank announced that the single currency reserves dela in transactions in global financial markets but warned that the granting of loans in euros in Eastern Europe may create risks for both borrowers and banks. According to the financial crisis, the ECB has not breached the dominant role of the U.S. dollar in global financial markets.

ECB launches quantitative facilities

viliyana89 — Mon, 06 Jul 2009 00:48:45 +0000

Italy’s central bank will buy bonds secured 10 billion euros as part of the European Central Bank for the purchase of bonds for a total of 60 billion euros, reported Reuters. Total program of 60 billion euros has been allocated among the 16 countries of the euro on the basis of their shares in the capital of the ECB. ECB President Jean-Claude Trichet said on Thursday that the bank will begin its emergency program to purchase secured by mortgage and public debt bonds of July 6, with a maturity of between three and 10 years. National central banks will make 92 percent of purchases under the program, which aims to increase the liquidity of banks and to promote credit flows. Each of the central banks of the euro area countries will come on the market as other investors who participate in bids when purchasing bonds on the primary market or secondary market. In the latter case the central bank will make an offer for a significant amount and will have to focus on securities that are sufficiently liquid.
The Bank of Italy will buy bonds in different markets in the euro area, although it will focus mainly on its domestic market. Currently the Italian market offers some tools of this kind, but there are several local banks that plan to major debt issues in the coming months.

Islands of protectionism emerged in recession

viliyana89 — Thu, 02 Jul 2009 21:03:26 +0000

Only a month after the leaders of the G 20 meeting in Washington promised that it will not interfere with the free market with trade barriers, governments around the world start to help strapped to their industries at the expense of foreign competitors – Bloomberg agency said. This month, Russia raised the import duties on cars from 25% to 30%. China to introduce tax rebates for exporters. India introduced import quotas for steel. Like it was not enough, the U.S. considers state aid for carbuilding companies and France paid 7.6 billion dollars to protect national companies from foreign usurper. All this suggests that the global recession might lead to protectionism, which in turn is dangerous for the recovery of the economy in the world, but for sober reaction in times of crisis. Even the next day after having promised that he would defend the freedom of global trade, world leaders began to introduce measures to prevent it, says U.S. specialist. According to economic historians, the trade war during the Great Depression after the adoption of the Law Turmoil Hawley (set record-high import duties on goods 20.000 in 1930) has increased the global economic crisis.
Customs Law of the senator and representative Turmoil Hawley was not a particular turn in U.S. policy, but has led to real economic shock, since it is produced responses from around the world. He opened the door to trade protectionism in the world, explains Professor Dough Irwin. The law, which is intended to help the U.S. industry, solid to death in 1929 trade between the U.S. and Europe, rolling it over three times. World trade fell by 66 percent between 1929 and 1934, official data shows. According to Jacob Medsan (2002) the effects of customs and non-customs trade barriers in the 1929-1932 period are responsible for the majority of the decline in world trade in the world during the depression. According Medsan fair international trade during the Great Depression has dropped by about 33%. He believes that 14 percent of that number due to the decline in the GDP in different countries, 8% because of increased duties, 5% due to the increase of duties due to the deflationary process, 6% due to the introduction of non-customs trade barriers. These are the lessons of the Great Depression, they are well known and world leaders meeting in Washington promised not to repeat old mistakes. At least one years does not pose barriers to global trade circle, agreed to politicians. Chamber of Commerce of the United States, of which companies such as Nike, Pfizer and FedEx rise of these promises.
According to Richard Baldwin Director at the Center for Economic and Policy Studies in London, the new protectionism is being modest. But with the spread of the recession in the world situation may change. Regulations of the WTO allows developing countries to increase tariffs on imported goods, but do not enter into conflict with WTO rules. For its part, the U.S. and other rich countries must respond to the protests of their industries and bring the anti – dumping suspence. Along with that now in the developed world increasingly are supported by funds of local government industries. This is subject to legal attack, but the years are needed to advance the process in the court of the WTO in Geneva. Even if the barriers are completely legitimate, they pose a threat to global economy, says a researcher from the Institute for International Economics Peterson. There are plenty of examples of the new protectionism – indicates Bloomberg. The European Union is considering to impose duty of 79% for stationery products from China following a complaint by the Austrian company. The Vietnam raises import duty on steel from 8% to 12% after trying to encourage local production. Related actions reflect Ukraine, Ecuador, Argentina.
At the end of November India restrict imports of certain steel products and timber, require an import license. In addition, India is considered anti – dumping measures against imports of chemical products, mainly from China and steel. Greater concern still create that rich countries with money fiska assist local companies. The Bush administration is considering supporting carbuilding national companies, aid will be extended to foreign companies that produce and sell cars in the U.S.. The manufacturers of textiles, paper and steel lobby in the U.S. Congress to impose restrictions on imports from China. According to lawyers aim first is economic incentive funds to be limited to U.S. companies.
Analyst from the German Marshall Fund in Brussels said: government support might be torch which illuminates the overall return to protectionism.

Trichet hurt the EUR again

viliyana89 — Thu, 02 Jul 2009 20:49:38 +0000

The President of the European Central Bank Jean Claude Trichet said that current levels of interest are adequate and recent economic data confirms this. Trichet said the decision to preserve the basic interest rate was unanimous, but can not believe that 1 percent is the minimum of interest on refunds. According to him, the economic slowdown will reduce the pace in the second half of the year and next year is expected positive economic growth. Trichet said that inflation expectations remain very limited and monetary analysis show that the medium is a time price stability. In his negative rates of inflation will be short, for the next few months. He stressed that short-term movements in inflation are not taken into account when taking political decisions. President of the ECB believes that pressure on prices has weak economic activity, as though inflation is derived from the growth of money, there is a clear monetary expansion. According to him the negative inflation of consumer prices for June is in line with the expectations of the ECB, in the medium term is possible rise of oil and other energy. Trichet reported that a decline in short-term loans, but banks have already “moved” low interest rates to consumers. Therefore, he expected an improvement in conditions in the financial sector, but banks need to strengthen its capital base.
Trichet confirmed the program for purchase of guaranteed bonds amounting to 60 billion euros and confirmed the rules it adopted in June month. He considered refinancing operations of the banks in which loans were granted for 442 billion EUR 12-month maturity will increase bank liquidity, but can not yet speak of a new auction. According to him, the positive effects of the policy of the ECB are visible in the so-called reduced. risk premiums and the decline in interbank rates. Trichet said risks to economic outlook are balanced, but concerns remain for the feedback from the real economy. He stressed that the ECB is ready to stop immediately facilitate additional measures when starting the recovery of the economy.