The Fed was slowly heading in this direction by the turn of the century. It finally began announcing its interest-rate decisions in 1994, and started issuing regular press releases in 2000 (though it did not hold regular press conferences until 2011). These changes reflected a new appreciation among central bankers of how changes in short-term policy rates work their way through the economy via expectations and market pricing. Today, the People’s Bank of China (PBOC) is undergoing its own quiet revolution. Like the Fed before it, China’s central bank is becoming more communicative. But the real revolution in Beijing concerns exchange-rate policy, with the PBOC increasingly allowing market forces to determine the renminbi’s value. Both developments are welcome. The PBOC’s communication offensive has much to do with its new governor, Yi Gang, who was appointed in March 2018. Last month, the bank hosted its first-ever briefing to explain the latest economic and … [Read more...] about China’s quiet central banking revolution takes shape
Syndicate bank interest rates
SYDNEY/HONG KONG: Investment bankers are bracing for the start of a landmark legal case about alleged cartel activity in Australia's financial sector, nervous the proceedings could lead to increased scrutiny and tougher measures from regulators worldwide.Australian authorities filed criminal charges in June against the local units of Citigroup , Deutsche Bank , Australia and New Zealand Banking Group and six bankers over a US$2.3 billion stock sale.Most past investigations into cartels by the Australian Competition and Consumer Commission (ACCC) have looked at trade in goods. This is the first time a probe has led to charges alleging criminal cartel conduct in the financial sector.Lawyers representing the banks and the six bankers are due to appear in court in Sydney on Tuesday, although hearings are not expected to begin for several months.WHAT ARE THE CHARGES?The charges are linked to an August 2015 sale of US$2.3 billion worth of new ANZ shares and the subsequent trading of some of … [Read more...] about Why are investment banks nervous about Australia’s cartel case?
NEW YORK (LPC) - A record USUS$1.45trn of US syndicated lending to companies for acquisitions, leveraged buyouts, dividends and refinancing in the first half of the year has propelled bank fees from arranging the loans to all-time highs.The USUS$8.1bn earned in the first half of this year slightly topped the prior record USUS$8bn taken in during the second half of last year, setting a new peak, according to Freeman Consulting Services.The lending pace escalated in the second quarter and is seen staying heated through year-end, encouraged by lower US corporate tax rates and a federal judge’s June endorsement of the long-pursued mega-merger between AT&T and Time Warner.Bankers eagerly awaited the outcome of the AT&T/Time Warner ruling, long after the deal was first announced in October 2016, and now expect the decision to keep the chute wide open for similar mergers and acquisitions (M&A) in coming months.For lower-rated borrowers, there is less onerous enforcement … [Read more...] about US mergers help bank fees spike to record highs
Infrastructure projects often have social benefits which are not priced into project revenues, and traditionally considered better addressed by subsidised public finance. While gaining in popularity in emerging markets, private funding for infrastructure projects is still insufficient to meet the ever-growing demand. During the recent World Bank Singapore Infrastructure Finance Summit 2018, Asean finance ministers unanimously agreed on the need for greater private-sector participation to fund the region’s infrastructure. Of the US$3 trillion that Asean needs for infrastructure by 2030, only 30 per cent is being met by existing funding. To address this shortfall, Asean aims to attract private investors by improving laws and regulations to make infrastructure a more attractive asset class. In addition, better financing co-ordination can boost public-private partnerships (PPPs). Private funding sources have in recent years grown in diversity, from commercial banks, … [Read more...] about Crowding in Asia’s private sector to accelerate infra development
The year 2017 was one of smooth tailwinds – even though everyone was mesmerised by the Trump reality show. Moving deeper into 2018, one issue on everyone’s minds is whether headwinds will finally blow as the tide goes out. Last week in Tokyo, Fed vice chairman Randy Quarles was visibly confident about the US economy. Real gross domestic product growth through the final three quarters of 2017 averaged almost 3 per cent – faster than the 2 per cent average recorded over the previous eight years. The European recovery, barring Brexit, looks just as rosy. Euro zone growth has stepped up to 2.7 per cent in 2017, with inflation at around 1.2 per cent and unemployment down to 8.7 per cent, the lowest level recorded in the Euro area since January 2009. In Asia, 2017 Chinese GDP grew by 6.9 per cent to 59.7 trillion yuan ($9.4 trillion), just under half the size of the US. With per capita GDP reaching $8,836, China is expected to secure … [Read more...] about Blood on the trading floor: A year of fear and greed for world markets