The global economy faces a growing risk from big financial market bets that could quickly unravel if investors get spooked by geopolitical tensions or a shift in U.S. interest rate policy, the International Monetary Fund said on Wednesday.
Tags: Interest rate
China's rate-cut likely to hurt banks, curb new loans to small borrowers
China's latest interest rate cut is set to dent the profitability of domestic lenders, especially mid-sized banks, which are already suffering from higher bad loans and a slowdown in profit growth.
PBOC cuts benchmark interest rates
Recently released Chinese data suggest a grim economic outlook for the country. Foreign direct investment has been consistently declining; consumer price index showed some stability this month but remained below 2 percent, flash manufacturing PMI also declined in November and gross domestic product fell to its slowest pace since the global financial crisis, registering 7.3 percent year-on-year expansion in the third quarter.
U.S. underlying inflation rising; economy firming broadly
Underlying inflation pressures rose in October, even as falling gasoline prices kept overall U.S. consumer prices in check, bolstering expectations of a mid-2015 interest rate hike from the Federal Reserve.
Fed awards $219 billion of term deposits
The Federal Reserve awarded $219.114 billion of seven-day term deposits to banks, a record amount, at a test auction held on Monday, it said in a statement on Tuesday.
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Federal Reserve officials nudged their expected path of interest rate increases higher on Wednesday, but did little to change the outlook for a long slow climb back up to normal monetary policy.
The European Central Bank's attempt to reduce the excess liquidity levels of banks in the financial system had prompted the central bank to call on banks it had loaned to repay its debts at a reduced rate.
The People's Bank of China had undertaken a program of lowering money supply to avoid further inflation, but this may lead to lack of financial support
Nearly USD1 billion would be the settlement amount to be paid by Rabobank for allegations of interest rate manipulation for the Japanese yen.
Senate, backed by President Barack Obama and Education Secretary Arne Duncan, approved the bipartisan deal that would reverse spike in student interest loans.
China's central bank announced interest rate reform. The central bank of China, the People's Bank of China (PBOC), announced that the floor on commercial banks' lending rates was removed.
Iceland's current dilemma is removal of capital controls but by increasing the money supply, it would present long term risks to its capital market.
