Financial Stability
Fannie, Freddie debt fears could have sparked run
Central bankers' fears over the collapse of Fannie Mae and Freddie Mac threatened to lead to sales of US agency debt, the scale of which could have sparked a run, the US regulator responsible for the two government-sponsored enterprises (GSEs) has said.
HKMA steps up stability efforts
The Hong Kong Monetary Authority (HKMA) on Tuesday stepped up its efforts to enhance financial stability, issuing a blanket guarantee for customer deposits and offering to re-capitalise its banks.
Asian central banks act on liquidity shortages
Signs of heightening liquidity tensions in Asia emerged on Tuesday, with the Reserve Bank of India adding Rs20,000 crore ($4.16 billion) to its banking system and Bank Indonesia implementing measures to ease stress in foreign-currency markets. Bank…
Canada, Japan outline responses to G7 plan
Canada and Japan, the industrialised countries least affected by the current turmoil, on Tuesday announced their responses to the G7 plan.
Valuation at the heart of crisis: Banque de France
Valuation issues lie at the heart of the financial turmoil, Banque de France stated in its latest Financial Stability Review.
RBI's Subbarao: don't overlook us in crisis
Policy makers from developed countries need to take emerging markets and developing countries into consideration in their responses to the current turmoil, noted Duvvuri Subbarao, the governor of the Reserve Bank of India.
US bailout to include "significant" equity stake
The US Treasury is likely to spend a very significant amount of the $700 billion at its disposal on recapitalising the US's battered banking sector, an official who will oversee the Troubled Asset Relief Plan (TARP) told an audience in London on Monday.
Markets rally on global bailout
Equity markets bounced on Monday on signs that coordinated action taken over the weekend had helped soothe investor sentiment.
Australia, NZ guarantee all deposits
Australia and New Zealand became the latest countries to guarantee all deposits over the weekend.
EU agrees to re-capitalise banks
European Union (EU) officials on Sunday agreed to follow Britain's lead in pledging to inject sufficient capital into the region's battered banks.
Why failed bank executives must go
Senior management of banks that require public assistance should be replaced, says Robert Pringle, the editor-in-chief of Central Banking journal.
Markets plunge, interbank rates rise despite cut
The unprecedented half-point coordinated rate cut by six of the most powerful central banks on Wednesday has done little to abate the panic in global equity and interbank markets.
Icelanders protest outside central bank
Icelanders have staged a protest outside the country's central bank reportedly calling for the resignation of the governor, David Oddsson.
Worldwide cuts are not enough
The coordinated cuts by six of the most powerful central banks could prove a useful step in improving market sentiment. But only if it is coupled with more action at both a national and international level, Avinash Persaud, the chairman of Intelligence…
Rosengren on aid to money market funds
Eric Rosengren, the president of the Boston Federal Reserve, argued that many assumptions about the financial system have proven to be seriously flawed.
Iceland nationalises biggest bank, halts trading
The Icelandic authorities on Thursday took control of Kaupthing, the country's biggest bank, and halted trading in all shares listed in Reykjavik.
Paulson hints at possible bank recapitalisation
Hank Paulson, the US Treasury secretary, has indicated that America is likely to attempt to recapitalise its ailing banks.
SNB's Hildebrand and Italy's Saccomanni on crisis
The crisis has shown central bankers and regulators rightly predicted that highly-leveraged institutions presented a threat to stability. But officials' attentions were directed at the wrong type of institution, admitted Philipp Hildebrand, a governor of…
Fed offers more support to world's biggest insurer
The Federal Reserve has loaned American International Group (AIG), the world's biggest insurer, an additional $37.8 billion, taking the size of beleaguered company's borrowing facility with the central bank up to $122.8 billion.
Bernanke on economic and financial conditions
Ben Bernanke, the chairman for the Federal Reserve, set out the reasoning behind policies towards Fannie Mae and Freddie Mac, Lehman Brothers, AIG as well as the Treasury bailout in a speech to the National Association for Business Economics.
Britain bails out banks
The British authorities on Wednesday pledged to spend up to £50 billion ($86 billion) in taxpayer funds to recapitalise its beleaguered banking industry, shares in which have plummeted in recent days.
Spain sets up €50 billion rescue fund
Madrid on Tuesday said it would establish a rescue fund to buy high-quality assets from its banking industry, hampered by a downturn in the country's housing market and the global turmoil.
Riksbank pumps Skr5 billion into Icelandic bank
The Riksbank on Wednesday agreed to prop up Kaupthing, Iceland's largest lender, with a Skr5 billion ($700m) loan, on fears the bank's liquidity problems threatened the stability of the Swedish financial system.
Without proper incentives we are doomed
The financial system cannot survive in anything like its present form if bankers continue to make profits and taxpayers assume the losses. Yet that is the trend, certainly in the United States with its ill-advised Paulson bailout, and increasingly in…